In March 2019, the Seattle City Council unanimously approved a measure called Mandatory Housing Affordability (MHA), which upzones 27 neighborhoods in the region. Mayor Jenny Durkan quickly signed the measure into law and it is set to go into effect on April 19th. MHA’s main objective is to add affordable housing to the city through the allowance of taller single-family and multi-family residential projects. In all, city official estimates indicate that MHA will, at a minimum, provide 6,000 new affordable homes for low-income residents.
The results are in and according to the U.S. Census Bureau, Seattle tops the big city in the U.S. for the number of college-educated residents, coming in at a staggering 63 percent for residents age 25 and older. As Seattle Times reports, “among the 50 largest cities in the country, we’re the only one to hit that 60 percent mark — something we first achieved in 2015.”
Our local real estate market took some interesting turns in 2018, as the frenetic conditions of the first half of the year gave way to a more balanced environment in the third quarter. Data for the fourth quarter of 2018 has arrived, so before we turn our attention to the new year and what lies ahead, let’s take a look at the market trends that closed out 2018.
According to an article published by Seattle Times, “The single-family zones that make up about 75 percent of Seattle’s residential land have accommodated just 5 percent of all new housing added in the city this decade,” this courtesy of a report recently released by the planning commission. The advisory report, which was eighteen months in the making, says mild changes could be made in areas that are predominantly single-family homes right now.
The shifting Seattle real estate market has grabbed headline after headline in recent months, with the Seattle Times making proclamations earlier this week that suggest Seattle’s home prices are dropping faster than any other metro area in the nation. Contrary to headlines, however, trendlines point to a much different outcome, indicating slowing—not lowering—home price growth, amidst rising inventory and typical seasonal trends for the region. So, what does this mean for homebuyers in the Emerald City?
Until recently, the Seattle real estate market headlines didn’t seem to change much, each remarking upon the area’s unprecedented home price growth and highly competitive climate for buyers. The past few months, however, have given way to a slightly different narrative, as increasing inventory and a less frenetic environment have pushed the market closer to a neutral one (though still decidedly in favor of sellers). Below we’ve outlined how these new market trends are playing out in the local real estate market with a look at Realogics Sotheby’s International Realty’s recently released market report for the third quarter of 2018.
As stated recently in a Realogics Sotheby’s International Realty (RSIR) blog, “The main cause of Seattle’s urban evolution is, first and foremost, that people want to live here.” That fact is reflected in the constant stream of people moving into the city. Earlier this year, The Seattle Times reported that Seattle grew 18.7 percent in the last decade, gaining 114,000 people and ranking as the fastest growing city in the nation. That growth is expected to continue through the next several decades; and by 2035 the expected population of Seattle will gain another 120,000 residents (and another 115,000 jobs).
The record high housing prices in Seattle have been in the news for over a year and a half now. "Seattle's median home price of $830,000 is up 14 percent from a year ago and sets a record after holding steady at the previous high of $819,000 in March and April" states The Seattle Times. Despite new and increased inventory in May, single-family home prices continued to increase further, still - arriving at the current $830,000 median.
The Holiday season is upon us and we are so excited to attend some themed events in our communities! Hope to see you there!
November 21st - January 1st: Seattle Gingerbread Village
November 24th - December 24th: Snowflake Lane in Bellevue
November 24th - January 1st: ZooLights at Point Defiance Zoo
November 24th - January 1st: Wild Lights at Woodland Park Zoo
November 25th - December 31st: Garden d'Lights at Bellevue Botanical Garden
December 1-3, 8-10, 15-17: Leavenworth Christmas Lighting Festival
December 1st - December 23rd: A Christmas Carol at Second Story Repertory in Redmond Town Center
December 1st - December 23rd: Issaquah Reindeer Festival
December 14th, 6pm -9pm: SAM Lights at the Olympic Sculpture Park
As a recent Realtor.com report indicates, home prices around much of the country continue to increase and “in large swaths of the country, a cool million has mostly come to represent the new standard for good, upper-middle-class housing.”
Last month, US News released their annual ranking of top U.S. cities to live in, and according to their calculations, Seattle ranks 7th in a comparison of 100 of the nation’s top cities. The list is based on a methodology incorporating the job market index (20%), value index (25%), quality of life index (30%), desirability index (15%) and net migration (10%). What elevated Seattle to the top? As Naomi Tomky describes, “for many, living in Seattle has as much to do with what’s outside the city as what’s inside. Less than an hour from downtown, residents escape for the day or weekend to wineries, ski resorts, hiking trails and sprawling parks. Seattleites bring that love of nature into the city as much as possible, enjoying Seattle’s parks and tree-lined streets” in addition to what Tomky says is an inherently calm and patient attitude.
November’s numbers indicate that buyers continue to reign in King County, as residential homes spent an average of just one month on the market, down nearly 30% compared to last year. Inventory continued its low trend, as the number of active homes was down 44% year-over-year and 27% month-over-month. Given the low inventory and increased demand, the median sale price rose to $440K, up slightly from last month and nearly $40K from the previous year. In downtown Seattle, condo active inventory held steady month-over-month but was down 12% from the previous year. Downtown Seattle condos likewise saw an increase in median sale price, up over $100K compared to last year’s numbers.
For the latest numbers from areas around the sound, View November’s Market Reports >>
What are the hottest cities for Millennials to buy homes in for 2016? A recent Realtor.com article outlines, "Where's Hot - and Where's Not - For Home-Buying Millennials" in the coming year. As Yuqing Pan writes millennials are making their presence known in the housing market: "numbering 43.5 million, the older group of millennials (aged 25 to 34) makes up 13.6% of the U.S. population but fully 30% of the current population of existing-home buyers."
Rather than try to move to "trendy" cities with high price tags such as New York City and Los Angeles, "young home buyers are increasingly turning to cities that are relatively affordable and have lots of jobs and maybe even a trendy atmosphere all their own." And one of those more affordable cities for 2016 is likely to be Seattle.
With a median listing price of $398,000 and a 14.9% population share of older millennials, Realtor.com places Seattle 7th on their list of 10 cities, writing that "the headquarters of Microsoft, amazon, and many other tech companies large and small" mean that there has been "an influx of educated, young tech workers, which contributes to its uniquely cool culture." And of course, don't forget about Starbucks of course!
For Sale vs. Sold
Average Price Per Square Foot
Days On Market | Sold/List Price %
Average Price For Sale And Sold
Months of Inventory
It's no secret that Seattle is experiencing record breaking growth. For anyone who has driven, taken the bus, or even tried walking anywhere during rush hour (or any time of the day, for that matter) can attest to the very noticeable density of people in any given area.
But just how does each neighborhood stack against one another? The Seattle Times has compiled a very detailed set of data that shows neighborhood census tracts throughout King County. Thinking that South Lake Union would be densifying the quickest?—the real answer may surprise you!
While it may seem incomprehensible for the generation coming of age in the Great Recession to be purchasing homes, the rate at which rents are rising makes renting to be a less economical option for a growing number of millennials.
While nationally the median age at which people are buying homes is rising, the situation is just the opposite here in Seattle. Despite the existence of student loan debt being the main hurdle for most millennials, many here in Seattle work in the tech industry, which allows them the ability to pay down debt quicker. Coupled with historically low interest rates on home loans and too high of rents, the ability for Seattle area millennials to purchase a home will only increase.
Longtime Bellevue resident, Expedia, is hopping across the lake to Seattle proper by 2018. Careful not to create an "either-or" situation between the two cities, Bellevue City Manager Brad Miyake described Expedia’s move as “a real estate decision — pure and simple.”
The move seems to be a part of a much larger, growing trend of tech companies expanding their operations within the Seattle city limits; Amazon and Facebook also have both recently announced huge expansion projects. Along with the move to the soon-to-be ex-Amgen campus, Expedia also plans to add another 1,500 positions to its already 3,000 strong, employee base.
Time will also tell on how the move will affect the traffic and commute for area residents, as the nearly 75% of the company's employees living on the Eastside will now have to traverse an already overcrowded corridor to Interbay.
In a print article entitled “How Foreign Investment is Changing our Neighborhoods,” Seattle Magazine’s Jenny Cunningham prominently featured Realogics Sotheby’s International Realty (RSIR), an expert on the latest in this massive trend. After “quizzing” her readers about the most expensive housing market in North America (Vancouver, British Columbia) Cunningham describes that “in recent years, mainland Chinese have been buying Coal Harbour condos and Shaughnessy megamansions, and the general consensus is that these rich immigrants are the main reason for Vancouver’s skyrocketing housing values.” She then asks, “could Seattle be next?”
Elucidating the tendency for Chinese investors to come to the Seattle area in search of homes, Cunningham says “statistics from the University of Washington confirm that trend” as “there are more students from China at the UW than ever before.” She even adds that “believe it or not, Seattle is trending as a sexy city among China’s college-age kids.”
Another point of influence in the article? The EB-5 Investment Program. When Canada ended their popular direct foreign investment program back in 2014, Dean Jones predicted in an interview with Jake Whittenberg from King 5 News, that many investors would likely “prefer the Seattle and Eastside areas,” supported by census data at the time which revealed that Asians were “the fastest growing demographic in Washington State, with many Eastside communities comprising between 25% to 50% of the population.” This trend has come into fruition with the recent rise of developments, highlighted when RSIR attended two high-profile ground breaking ceremonies: the Portola Tower by Dargey in Belltown and the Southport Hotel by SECO Development on Lake Washington in Renton. Cunningham likewise describes the significance of the EB-5 Program, as she writes that “Chinese investors are also building market-rate housing and creating jobs for locals under [it],” and citing Kevin Stamper who told her that “85 percent of applicants are from China.”
So, Cunningham finally asks, “Who’s betting on China?” RSIR is listed as one of three companies behind this trend, as the article reads: “‘China is a top focus for us right now,’ says Dean Jones, CEO of the Seattle-area offices of Realogics Sotheby’s International Realty. Jones has traveled to China several times recently to raise awareness of the value Seattle offers, compared to other West Coast cities. Realogics launched an ‘Asia Desk’ in its Kirkland office in January, complete with tearoom and staffed with Mandarin, Cantonese and Korean speakers who can help foreign clients with everything from travel arrangements to finding a school for their children. Jones predicts this is just the beginning of an influx of buyers from China. ‘What is really surprising is that China hadn’t discovered Seattle earlier.’”
Trulia released their annual report of the hottest housing markets to watch for in the coming year, and we have to say that we are not surprised to see that Seattle picked up the number ten spot on their list. Erin Renzas explained that this year, Trulia’s Chief Economist Jed Kolko determined which markets made the cut using “fundamentals such as job growth, rising incomes, and more household formation.” Thus, Renzas says his ten selections, “have strong fundamentals for housing activity,” which “include job growth, which fuels housing demand, and a low vacancy rate, which spurs construction.” She added that they “gave a few extra points to markets with a higher share of millennials.”
10. Seattle, WA
Companies like Starbucks, Microsoft, Amazon, and UPS have provided steady job growth for the area, but, hey, Seattleites know how to rock, too — as the home of grunge, which is still popular in the music scene there.
We cannot wait to see what 2015 brings as Seattle received a lot of attention this past year as Forbes Recognized it as Just About the Coolest City in the US, CNN Noted it’s Millennial Appeal, CNN Money Called it a Hot Market for Chinese Buyers, and KOMO TV Reported on the Downtown Building Boom.