Seattle Rents: High, But Not Highest In Washington State

It’s not a news flash that the real estate scene in Seattle has exploded in recent years. The Emerald City has gone from a town most people outside the state only associated with coffee and flannel, to the tech capital of the US (save for our friends in Silicon Valley). As home to some of the biggest tech names in the world and a booming job market to match, it’s fair to say there’s might not be enough housing to meet demand. Or, at least to meet demand AND your budget.

High rises, apartment buildings and condos are going up all over the city, and soon, our beloved skyline will be dotted with more and more buildings and towers, making the Seattle of just 10 years-ago look almost unfamiliar.

Seattle has recently made headlines as one of the most expensive places to live, get this, in the world. That’s right, recent data has placed Seattle’s rent rates at 5th highest in the nation and, supposedly 9th highest in the world! However, San Francisco and New York still dwarf us, tying for number one most expensive, world-wide.

Those of us who are Seattle Natives know that the average rental rate in Seattle has increased fairly dramatically in the last few years, but it’s interesting to note that, while Seattle’s rents have been on the rise, they don’t quite top the list of highest rents in the state.

According to recent data from Apartment List, Seattle ranks at number 5 in the state for highest rents, with the average monthly rent for a one-bedroom apartment at about $1,650.

Surprisingly, Mercer Island tops the list of cities in Washington for highest rents. A one-bedroom on Mercer Island goes for an average of a whopping $1,890 per month. No one said Island living was cheap, I suppose.

Filling in the gaps between number 1 and number 5 on the list are Bellevue at number 2 with an average of $1,860 per month for a one-bedroom (not a whole lot lower than their neighboring Island), Redmond at number 3 with an average of about $1,690 monthly rent for a one bedroom and Kirkland at number 4 with an average monthly rent of $1,660 for a one-bedroom.

Seattle and the Eastside are not the only places in Washington with rising rent rates. Tacoma tops the list nation-wide for fastest growing rent with a year-over-year growth rate of 7.7 percent. Seattle comes close, but not close enough to that figure with year-over-year rental rate growth at 5.3 percent.

Staggering growth aside, Tacoma is still a bargain in the rental market compared to Seattle, with a one-bedroom in Tacoma going for an average of $1,000 per month. For those of you keeping score, that’s a savings of $650 compared to Seattle.

But, proving that some things really don’t change, the cheapest places to live in the Evergreen State are still East of the Cascade Mountains. You can get a one-bedroom for only $600 per month in Walla Walla and it’s not much pricier in the State’s second largest city, Spokane, at around $630 per month.

What a difference a mountain range makes…

Washington State Home Sales Soar Past Previous Highs

sold-sign2015 may have been an interesting year for many reasons, but in the world of Washington real estate, it sure felt like the good old days.

Not since the way-back-when of 2007 had so many homes and condominiums sold in the Evergreen State. According to the Northwest Multiple Listing Service, 2015 saw a whopping 88,331 homes changed hands last year, about  14% more sales than in the previous year. Those who have done the math say that works out to about 75,975 single family homes and 12,356 condominiums, valued at  approximately $34 billion, about 23% more than the dollar volume sold the year before. Those impressive figures make 2015 one of the best years for Washington State real estate in recent memory.

The last time this state saw real estate figures like that was in 2007, before the bubble burst and sent the country into what is not-so-affectionately known as The Great Recession. Even in 2007, the figures only added up to about 82,197 sales valued at $32.3 billion, according to the Northwest Multiple Listing Service.

Furthermore, despite a ‘lower inventory’, so to speak, prices and number of sales continue to grow. In King County, the median home price was $480,000 and more than 26,600 homes sold. Compare that to a median price of  $440,000 and 26,600 homes sold, in 2014 and you’ll notice a jump of close to 10%. Snohomish and Pierce counties can top those figures with growth figures for both median home price and number of homes sold over last year at nearly 16.80% ($355,000, up from $326,360 with 11,303 homes sold) and 17.39% ($249,950, up from 230,000 with more than 13,200 homes sold) respectively.

Overall, region-wide, the growth was about 8.8% from 2014, with a median price for single family homes and condominiums at about  $310,000, up from $285,000  last year.

Numbers like this are a positive and encouraging sign for the state of the  real estate market and the country’s economy as a whole. Let’s just hope nothing comes along and tries to ‘burst our bubble’ this time.

Dramatic Growth In Seattle-Area Luxury Homes Market

Luxury home available on Mercer Island

Luxury Mercer Island home available for $10,998,000

It’s no secret that Seattle’s housing market is one of the strongest in the nation, but what is a little surprising is the growth in the luxury homes sector. According to a recent story by the Puget Sound Business Journal, 537 homes sold for more than $1 million in just four Bellevue ZIP codes alone over the past year, 108 more than 2014 and an increase of 25 percent. 60 homes sold for over $3 million in those areas, up 43 percent over last year.

In Seattle as a whole, 901 homes have sold for $1 million or more so far in 2015, compared to 689 in 2014, according to statistics from the Northwest Multiple Listing Service. Of those sales, more than a quarter (241) occurred in the Central Seattle area comprising the neighborhoods south of the ship canal, north of I-90, and east of downtown. Most were clustered on North Capitol Hill and in the neighborhoods bordering Lake Washington, such as Madison Park, Washington Park, and Leschi. The most expensive sale of the year (so far) was a 9,820-square-foot estate on McGilvra Boulevard in Washington Park that fetched $5.75 million, followed by a lakefront Cape Cod-style home in Washington Park, which sold for $5.195 million. The PSBJ article states that sales of homes priced $1 million or higher in Ballard and Green Lake are up a whopping 200 percent.

The Seattle area’s growing job market is cited as one of the main drivers of the luxury home sales market, as is strong interest from international buyers, especially from China. With tech companies flocking to Seattle and Eastside job centers, they bring with them highly paid executives who may seek out luxury homes. The PSBJ article states that “Luxury homes are bellwethers of a thriving economy and growing job market. They are the ultimate proof of a prosperous and strong residential real estate sector.”

If you’re interested in Seattle’s luxury homes market, please contact one of our residential agents today.

Real Estate Site Ranks Seattle No. 1 Housing Market

1150 17th Ave E-33. straightened smalljpgReal estate website auction.com has ranked the Seattle area the No. 1 housing market in the country for single-family homes, according to its analysis of home prices, sales data, demand, and economic factors. They point out the combination of strong price growth, at 10.9 percent over the year, and an equally strong increase in sales over the year, at 12.6 percent, as indicators of our market’s overall strength. The Seattle area’s solid job market keeps attracting new residents, and relative affordability compared to other tech hubs such as San Francisco, San Jose, and New York has seen demand continue unabated. Coupled with the fact that it is still 13 percent less expensive to buy rather than rent in Seattle means that everyone is trying to get their piece of the Seattle real estate pie.

Rounding out the top five behind Seattle are three areas in Florida – Fort Lauderdale, Orlando, and Palm Beach County – followed by our little sister to the south, Portland, where prices grew by 9.4 percent over the year.

If you are interested in buying or selling a home in the Seattle area, contact your local real estate agent today!

King County Home Prices Bounce Back in August

1After the median selling price for a single-family home in King County dropped to $485,000 in July, prices bounced back to just a hair under $500,000 in August, representing a 14.4 percent annual gain, and the biggest yearly gain of any month in 2015. Inventory in King County was also up slightly from July, and now stands at 1.36 months’ worth of supply, the most inventory we’ve seen since February, according to statistics from the Northwest Multiple Listing Service. In contrast, median prices within the sub-market of Seattle stayed essentially flat last month, having dropped by just $500 from $575,500 in July to $575,000 in August. However, that is a 15 percent increase over August 2014.

Inventory in Seattle followed King County’s lead and increased by a small increment to .91 month’s supply, up from .74 months’ worth in July. Lack of inventory continues to put pressure on the market in the Puget Sound region, with total listings down 29.7 percent in King County and down 32.7 percent in Seattle since this time last year. “The biggest challenges our buyers face are lack of inventory and the quality of homes to choose from,” MLS director George Moorhead said in a statement. Some believe this continued double-digit price growth combined with lack of available properties is not sustainable and that we may see a slowdown in the market as we enter the fall season, when inventory historically drops by about half.

The area condo market has made great strides over the year, especially in Seattle, where the median price rose from $299,000 in August 2014 to $395,000 this year – a staggering 32 percent. Prices increased more modestly countywide, but still showed strong growth with a 19 percent rise.

If you are interested in buying or selling a home in the Seattle area, contact your local real estate agent today!

A Hidden Cost That May Be Helping Drive Rent Increases

Parked CarsThe affordable housing crisis in Seattle is garnering attention from the media, homeowners and politicians alike. Rent costs continue to rise and more than 100,000 people are estimated to move to the Seattle area in the next 20 years. Minimal affordable housing options have over half of Seattle renters paying more than one third of their income on rent, an average of $1,501 per month for a one-bedroom apartment.

Common reasons thought to contribute to rising rentals costs are lack of rent control and the fact that almost 65 percent of the city is zoned for single-family housing, leaving limited areas for multifamily development. But an article in The Stranger recently outlined a less visible factor that contributes to monthly rental costs: parking garages in apartment buildings.

Off-street parking requirements and more conservative developers contribute to the, arguably excess, parking built for apartment buildings. It’s estimated that one parking stall in a residential garage can cost between $20,000 and $50,000. Depending on the size of the building this can add several hundred thousand dollars in cost, not to mention taking up space that could be used to construct far more profitable housing units.

The article states that though many still cite parking as an amenity they prefer, more than 30 percent of parking spaces in buildings built after 2008 go unused at night, according to a  2013 report by the Sightline Institute. So who pays for these parking spots? All tenants, even those without cars.

Because the developers rarely see a full return on investment for parking spaces, landlords generally pass on the expense to their tenants. These expenses, usually represented in higher rent, can add up to 15 percent of monthly rent, applying to all tenants regardless of whether or not they own a car.

This issue was recently addressed in the final proposal of Mayor Ed Murray’s Housing Affordability and Livability Agenda. “Off-street parking requirements or quotas have a large impact on the financial viability of new housing for both market and affordable housing development,” the report states. “Parking quotas act as density limits, inflate the average size and price of housing units, and prevent some smaller properties from being developed altogether.”

Price Growth In Seattle Area Slows In May

1S&P/Case-Shiller released its monthly home price index this Tuesday, and the numbers show that home prices in the Seattle metro area have reached a minor lull in the traditionally busy buying season, with the index up just 1.4 percent in May from April. Average prices stayed the same from April to May, whereas prices grew by 0.6 percent from March to April. The weaker than expected gains still reflect a 7.4 percent increase from last year, on par with year-over-year gains in April. The median price in the Seattle area is still 6 percent below the 2007 peak.

David Blitzer, chairman of the index committee, said in a statement that first-time home buyers are partially to blame. “First-time buyers provide the demand and liquidity that supports trading up by current homeowners. Without a boost in first-timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory,” he said.

Though the Case-Shiller index showed an overall gain of 7.4 percent from last year the most notable jump was still in the most affordable homes. There was a 10.7 percent gain in homes sold under $296,017 and only a 6.7 percent gain in houses sold over $471,764.

Data from CoreLogic shows that only 2.18 percent of homes mortgaged in King and Snohomish counties are delinquent by 90 days or more. A sharp decline from last year’s 3.26 percent delinquency rate, and the July 2012 peak of 6.68 percent.  This decline has helped to ground home prices.

Though gains have slowed for the current month, it is anticipated that the stagnation will not continue in the coming months according to Stan Humphries, Zillow Chief Economist.

If you are looking to buy or sell a home in the Seattle area, contact your local real estate agent today!

Nearly Half Of Seattle Homes Selling For Over Asking

Blue RidgeOnly four cities in the U.S. have a higher percentage of homes selling above their listing price than Seattle: San Francisco and San Jose, Calif. are seeing nearly 80 percent of homes selling above asking; Oakland, Calif. is not far behind at more than 70 percent; and Denver, Colo. is narrowly edging out Seattle with slightly more than 50 percent of homes going for more than list price. Seattle clocks in at just under 50 percent, according to Redfin Research. Despite home prices in Seattle being up 15 percent from this time last year, a recent report by the Puget Sound Business Journal showed that homes are not only selling for above asking, but FAR above asking. A home in Ravenna, where the buyers never personally set foot in the house before making an offer, sold for $1,175,000 – $200,000 more than its list price of $975,000. Similarly, a home in Magnolia listed for $699,000 ended up selling for $800,000. Underscoring the great lengths buyers are going to in order to purchase a home, even this home in Bellevue, which backs up to a 50-foot ravine instead of a backyard and was found to have cracks in its foundation, sold for $893,900 – 6 percent over asking.

Not only are homes selling for sky-high prices, but they’re selling in the blink of an eye. Seattle boasts the second lowest number of days on the market of any city in the U.S. at an average of nine days, according to Redfin. Only Denver is seeing its homes sell in a shorter period of time, at an average of just six days. With inventory down 27.5 percent over the year in Seattle and very high demand, it doesn’t look like this mad scramble for homes will let up in the near future.

If you have questions about buying or selling a home in Seattle, one of our agents would be happy to help you navigate this challenging market!

Median Home Price In King Co. Hits $500,000

1215 McGilvra NewThe median price of single-family home sold in King County has reached new heights this year. According to the Northwest Multiple Listing Service, the median price in King County has risen to $500,000, a 10.3 percent increase over the last peak of $481,000 in July 2007. In Seattle, the median is significantly higher than that, having risen 15 percent over the year to $575,000. It’s been rumored that we are in a bubble, but Alan Pope, a real estate appraiser in Redmond, says he believes we aren’t in a bubble, but that “… the balloon is growing, and I can’t tell when it’s going to stop.” In fact, the housing market is just gaining traction from taking a hit during the past recession and isn’t too far above the prices they normally would be had we missed it.

The Seattle area’s healthy job market has caught the eye of the nation and beyond. As more people settle in to Seattle and surrounding cities, the housing market has become quite competitive. With a surge of buyers and very little increase in single-family residential development, there is a shortage of houses on the market. Between March and May of this year, Seattle only had a month’s supply of single-family homes and condominiums on the market, according to a Seattle Times analysis of NWMLS data. Inventory in June of this year was well below the average three months’ supply, and the number of residential listings in King County was 23 percent lower than last year.

Other counties are seeing similar patterns. In Snohomish County, the median price of single-family homes sold was $360,125, that’s 6 percent higher than last year. Pierce County prices are up an impressive 9.5 percent, sitting at $257,000.

In Seattle, homes for sale sit on the market for an average of just eight days, compared to the national average of 28 days. When a home goes on the market, Seattle house hunters are ready to play ball, even if that means paying well above the listing price. The only true fix to relive the pressure on the current housing market is to build new houses. The National Association of Home Builders reports that there were 3,481 permits issued for new single-family homes between January and May, down 4 percent over the year. That might be due to the lack of adequate plats to build on. Allison Butcher of the Master Builders Association of King and Snohomish Counties told the Times that land is becoming increasingly hard to find in Seattle.

As for condominiums, we’re seeing a bit of a trickle-down effect, as the median price in King County was $287,000, up 7 percent over last year, and up 12 percent in Snohomish County, now sitting at $239,950. However, Pierce County is down about 7 percent, at $162,500. Listings for condos aren’t climbing as quickly as single-family homes, but they are taking some of the heat as buyers look for other more available options.

If you are interested in buying or selling a home in the Seattle area, contact your local real estate agent today.

Millennials Opt Out of Seattle’s Real Estate Goat Rodeo

Mt Baker

The fact that the housing market in Seattle is hot, is not new news, and finding a home without over paying is becoming quite a task. When a 1,100 square foot home listed at $559k, sells for $717K, it feels it might take miracle to lock something down that is both desirable and reasonable. Moreover, when, and more so, if¸ you find a great buy, the market heavily favors those willing and able to pay cash to win the bid. Well, there is one demographic of Puget Sound residents who aren’t jumping on the real estate bandwagon – millennials.

According to the Puget Sound Business Journal, people between the ages of 25 and 35 who are homeowners is at the lowest since the Gold Rush era. And for good reason. Overall, things are just more expensive now than they were during the previous decades. College tuition has tripled since 1980, causing millennials to take out college loans or needing to take a longer time getting their education due to having to work simultaneously. As such, paying off acquired debt, or simply just getting the basics (job, place to live, overhead costs) nailed down is priority number one. With such a competitive job market, it takes a few years (or ten) of hard work to reach reasonable earning potential.

open-house-illustration

However, Seattle has some of the biggest businesses headquartered here favoring hiring millennials, one of which is Amazon. The online retailer hires thousands of employees yearly, many of which are coming in out of state. Most of those recruits, still fresh to Seattle and a little leery of all the grey, are perfectly content with renting even if they could afford a nice house to match their nice salary. And this doesn’t just happen for Amazon employees, as Seattle has plenty company employees working the same model.

Not surprisingly, this might be a piece of why Seattle currently ranks second on the list of best cities to own a rental property (a jump from seventh place last year). The region’s job growth, paired with the number of people moving into the area, and with the lack of available homes for sale, these are some key factors in why the rental market is going so well. So, for now the millennials are opting out of Seattle’s real estate goat rodeo, but it doesn’t seem like too many people, no matter how ready, are having much success either.