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…

City Proposes Code Changes to Promote the Construction of Back Yard Cottages

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Seattle is seeking new and innovative ways to preserve affordability as housing costs continue to soar. Along with programs like the Affordable Housing Impact Mitigation Program and the Mandatory Housing Affordability Program, the city of Seattle is proposing to ease land use restrictions that hinder the building of backyard cottages, or in official parlance “accessory dwelling units.”

Since 2010 backyard cottages have been permitted in Seattle, but they are rarely built by homeowners. Only 159 were built in Seattle between 2012 and 2014.  Advocates for backyard cottages lament that the reason so few have been built in Seattle is due to the stringent regulations placed on them in the city’s land use codes. Under current city code, backyard cottages are subject to height limits, footprint, and square footage limits, and require off-street parking.  Along with these restrictions, the city has recently mandated that backyard cottages are subject to King County’s sewer connection charge, which cost one homeowner $10,000.

Portland, which is facing similar affordability issues as Seattle, has softened restrictions placed on backyard cottages. The city, which has allowed backyard cottages since 1981, removed requirements that each cottage must have dedicated off-street parking and a mandate that owners must live on the property, in either the main house or cottage. What made the largest difference to builders, however, was when the city waved the System Development Charges. These charges, which are a set of one-time fees for new or increased use of property, can run up to $12,000 and were a sizable deterrent to potential builders.  Since the city waived these charges, the number of accessory unit permits has drastically increased.  In 2015, there was approximately one permit filed per day.

In Seattle, the changes that the Office of Planning and Community Development are proposing will remove certain barriers that have kept homeowners from building backyard cottages. The most significant changes are an increase in allowable size for detached accessory dwelling units from 800 sq. ft. to 1,000 sq. ft. and decoupling the garage area from the allowable size.  An increase in height limit will also make a big difference in some situations. Under the proposal, owner occupancy would be required for only one year, rather than being abandoned altogether, in an attempt to limit speculative development interests. In making these changes, the Office of Planning and Community Development hope to increase the stock of moderately-priced housing options in Seattle’s low-density neighborhoods.

Luxury Condos at Bellevue Towers Finally Almost Sold Out

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Almost all the condos in Bellevue Towers have been sold. A sign posted in the lobby announced that 95 percent of the 539 condos had been sold. In reality, less than 19 are left available. By now, it’s most likely that there are even fewer available. There are several orders pending. 16 condos sold in May and 21 closed in April.

The towers were completed and ready for occupants in 2009. 230 future owners had put down a deposit but soon after the stock market lost half its value, only 35 units closed. In January of 2011 prices were lowered by around 30 percent and units began to slowly sell. Units have been selling quickly the past 3 months. Why? With home prices on the rise, a decision was made not to raise unit prices to meet the rest of the housing market.

It is expected that the Bellevue Towers will completely sell out within the next month or two. A few larger units with at least 1,900 sf remain and range in price from $895,000 to $6.5 million. The towers offer more than a few amenities such as a 24/7 concierge, entertaining/board room, half acre garden, work out rooms, spa areas and a theater room with big cushy chairs to relax in.

May Stats Regarding Increasing Inventory and Sales

housing statsBased on King and Snohomish County public records, foreclosures are   slowly decreasing to normal levels while inventory rose for the second month in a row. Measured by the number of “Warranty Deeds” filed with King County, sales rose 15% from March to April and were up 28% year-over-year. In Snohomish County, sales rose 8% month-over-month and 26% from May of last year.

Foreclosures in King County fell again but were just above last year’s level. Although Snohomish County increased in foreclosures, they are still at their second-lowest level in the last 11 months.

Buyers will be happy to hear that inventory in King County rose 15.6% this year compared to 2.3% between April and May of last year. Listing fell 3.1% last year in Snohomish County. This year they were up 6.0%.

5 Steps to Take Before Buying Your First Home

home buyerWith the housing market heating up again it has become more competitive and lenders are demanding more documentation regarding the sale process which means that as a first time buyer you want to be prepared and not have anything that can snarl the process. The following 5 steps will help a first time home buyer prepare for their first home purchase.

1.  Be sure to check your credit report. Make sure that there isn’t anything that shouldn’t be on there such as paid off balances, fraudulent charges or even family members’ credit. Your credit should be as clean as possible. Pay off any and all debt possible. If you feel the need to cancel any credit cards, do so strategically. If you decide to cancel multiple credit cards in a short time period be aware that can send out red flags to lenders. The best thing to do is to close the newest cards. Lenders like to see that you have a long standing relationship with credit companies as well as have more credit available a month than what you spend. It is also a good idea to have a savings account.

2.  Create a monthly budget so that you know what to expect spending wise when you buy a home. Wright down all your finances and as you save money for your first home, live as if you are making a mortgage payment so that you will be prepared spend less money once the home is bought. Be sure to stick to your budget.

3.  Be sure to find a good agent to help you in the search and buying process of your first home. Your agent should be showing you homes with in your price range, listen to your wants and needs pertaining to the house, help you become a strategic bidder, guide you through the process and they should be concerned about making you happy and not solely about their commission.

4. Find a good lender. It is important to find a lender that explains all aspects of the loan to you and one that is willing to look over your credit report with you and give advice as to what you can do to improve it. Be sure to interview several lenders before choosing one and wait until you find one you are happy with before having your credit checked. It will be another red flag and bump on your credit report if it shows your credit has been checked several times within a short time period. Do not settle for what may seem like the best deal such as settling with a lending company which you found and signed up with online. You may get a good rate but when the time comes to speak with an agent you may have difficulty getting a hold of one.

5. Keep a look out for properties and be ready to make an offer. The market has become competitive and you want to be quick at making a wise and competitive offer. Don’t make large purchases such as a new car which may lower your housing budget. When you find the house you are interested in, call utility providers and ask for usage history or contact the HOA so that you are aware of the average costs of living at a certain property and you don’t end up going over budget. Remember to continue to live and spend as if you are already making house payments so that you don’t end up under budget.

Prices of Seattle Homes up in the Past Year

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Compared to cities tracked in a national index, Seattle home prices rose  faster between February and March than 18 of the 19 other cities that were tracked. The 12 month rise was still within the national average. According the Standard & Poor’s/Case Shiller home price index, Seattle prices rose 3.0 percent for the month and 10.6 percent for the year.

Compared to a year ago, U.S. home prices jumped 10.9 percent in March which was the most since April 2006. More buyers are bidding on a small supply which is driving prices higher, making the market more competitive as well as improving the housing market. Phoenix had the highest annual gain with 22.5 percent followed by San Francisco with 22.2 percent and Las Vegas with 20.6 percent. New York had the smallest annual increase with only 2.6 percent.

Although the market is seeing higher gains, many home owners are not putting their homes on the market which is contributing to home prices rising and encouraging builders to heighten construction. Applications for building permits rose in April making it the highest level in close to 5 years.

Annual U.S. Home Value Appreciation Up for 6 Straight Months

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According to the April Zillow Real Estate Market Reports, U.S. home value continues to climb. April was the sixth consecutive month that home values exceeded a 5 percent climb. This is the largest streak since 2006. The streak should not be expected to last. As more inventory is offered in the market some home prices will have to fall to level out with the rest. The Zillow Home Value Forecast predicts a 4 percent climb in the next year although most markets have already hit bottom.

National rents declined 2 percent in April compared to March. Demand for rental properties is still strong. Many investors are buying homes, fixing them up and turning them into rental units. Because of this, many markets are seeing less inventory and sharp home value appreciation brought on by the investors. Over the past month there has been a slight increase in inventory in some markets as more housing is constructed as well as more sellers enter the market.

Short sales having same effect as foreclosures

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Many people who sold their home in a short sale are having problems getting back in the market due to the fact that their credit reports and scores indicate that they had been foreclosed on. This is preventing many from being able to qualify for a home loan and mortgage even though they may have cleaned up their credit and have twenty percent cash aside for a down payment. How and why is this happening?

The current credit reporting system does not have a code that distinguishes a short sale from a foreclosure. The code only shows that a home was foreclosed on and not sold in a short sale. This doesn’t seem quite fair and is being investigated by the Federal Trade Commission and the Consumer Financial Protection Bureau. Sen. Bill Nelson, D-Fla, requested that the FTC and CFPB investigate the issue and penalize any responsible parties if they do not fix the coding issue within 90 days.

Victims of Boston Bombing to be honored during Mother’s Day Dash

m-day dashThe Issaquah Schools Foundation had already planned on hosting a Mother’s Day Dash to benefit the foundation before the Boston bombings occurred. The foundation decided that the Mother’s Day Dash would be the perfect opportunity to raise money in honor of the victims of the Boston bombings by donating $1 for every participant that enters the race and donate it to the One Fund.

Christine Kipp of Ewing and Clark is a supporter of the foundation and was so impressed by what they are doing that she decided to match each donation dollar for dollar. She will donate $1 for every runner and walker that participates to the One Fund and foundation.

They are expecting there to be between 1,000 and 1,500 participants. The run starts at 9:00am on Saturday, May 11th on 12th Ave by the Issaquah Sports Authority. Entry fee is $25 for adults and children over 11 years old and $8 for children 10 years old and younger. For more information on the event please visit http://issaquahmothersdaydash.eventbrite.com/#.

Ways to Avoid Sabotage in Selling Your Home

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According to the National Association of Realtors, 44 percent of all new listings take 90 days or more to sell, 22 percent take 6 to 12 months, and 9 percent take more than a year. It’s a seller’s market, so why are so many homes sitting on the market for so long? Jeff Dowler, an agent with Solution Real Estate in Carlsbad, California believes it most likely is because of the home owner.

Asking an unreasonably high price for the home obviously is not going to  attract buyers. Limiting the hours and time on weekends or any day to allow the home to be shown also limits the number of potential buyers. It is best to have the house as available as possible to allow it to be viewed. Agents find it best that the seller is not home when it is being shown.

Other things that may sabotage selling your home and cause it to be kept on the market longer are:

  • Not having the home ready to be viewed at any time. An agent might call wanting to show the house to a potential buyer in an hour. If the house is dirty or messy, that can turn off anyone who might have been interested.
  • Smells in the house can be a turn-off as well. Musty, dirty smells will not give the house a “clean” feeling. Artificial smells from candles and deodorizers might make the interested buyer wonder what the owner is trying to cover up with the scent. If it is a nice day out, opening windows can help naturally freshen the air inside the home.
  • Not keeping the home maintained and fixing things. Most buyers may not be looking for a “fixer-upper” and may notice the little things that need to be replaced. They may see that as more work for them to have to do as well as more money they will need to spend and give the home a run down feel.

All you sellers out there who do not want to sabotage selling your house, be sure to be flexible with allowing it to be shown, keep the home clean and maintained and ask for a reasonable price for the home.