Thursday, April 24, 2014
A Booming Economy Keeps Seattle’s Housing Market Hot
A bounty of benefits, including a robust economy, temperate climate and wide selection of cultural and outdoor offerings, has fueled Seattle's emergence from the economic downturn of the last decade. A beneficiary of the city's boom is the area's housing market, which saw a record-setting year in 2013 in such areas as the number of homes sold, the total value of deals closed and median and average home prices.
Driving housing prices upward is Seattle's critically low housing inventory, which was at 1.8 months in early April 2014, according to the Northwest Multiple Listing Service. (A key economic indicator of the housing market, housing inventory is the time it would take to sell all properties on the market and is considered "balanced" at six months.)
Real estate experts predict that rising mortgage rates and a greater housing inventory will slow the record price increases of homes for sale in Seattle. But a variety of economic drivers, including a thriving tech industry, expanding aerospace manufacturing and the city's attractiveness to foreign investors, will continue to propel the Seattle economic expansion through 2014 and beyond. Attracted by job opportunities in the technology sector, nearly 23 percent of Seattle's population is made up of Millennials (20-to-34-year-olds), and their segment is projected to see a higher-than-average increase of 5.2 percent over the next five years.
Continued economic growth will keep the Seattle real estate scene as a seller's market for the foreseeable future. With a median sale price of $317,215, FSBO (for sale by owner) sellers listing their homes without the services of a real estate agent will further benefit, saving the agent's 6 percent commission, an average of $19,032 in the Seattle market.
Key features for Seattle homebuyers are related to outdoor spaces and having an open, bright home, according to a 2014 survey by ForSaleByOwner.com. Nearly two-thirds of Seattle homebuyers list a garage or carport as the most important feature in a home they are considering purchasing. An open floor plan and a home with natural light are next on the list of desired home amenities. Having the home in move-in condition and having a yard and an outdoor space such as a patio, deck or porch round out the top five most important features for buyers. The most common deal breakers for Seattle-area homebuyers are a lack of a garage or carport, a lack of a yard and a house that is not single-level.
Seattle's residential neighborhoods reflect the city's rich history and traditions, from the arts to the technology boom. Once known as a center of counterculture in the city, the Fremont area has been somewhat gentrified and now hosts the offices of Getty Images, Adobe Systems and Google, along with newer condominium developments. The upscale Queen Anne neighborhood, host of the 1962 World's Fair and many of the city's landmarks, contains 12 historical homes as well as a collection of late-19th-century mansions designed in the Queen Anne architectural style. The community of West Seattle was originally developed for government housing during World War II and revitalized through an award-winning 2003 city initiative to redevelop the community's mixed-income housing using environmentally sustainable development.
Outside of the city of Seattle are a range of residential styles and options. To the east is Redmond, the site of Microsoft's headquarters and the unofficial "Bicycle Capital of the Northwest." Communities of large single-family homes and newer condominium construction are interspersed with local wineries, hiking trails and other recreational opportunities. Seattle's largest suburb is Bellevue, situated across Lake Washington. Regularly appearing on lists of the best places to live in the country, Bellevue includes a well-developed downtown core with high-rise business and residential buildings, as well as single-family homes further from the city center. Bainbridge Island, a 30-minute ferry ride from downtown, combines easy access to the city with a rural feel. Housing options range from more modest rental homes in the town of Winslow to larger houses and estates. The local government tightly regulates new construction in order to maintain the island's green spaces.
Up next: The final entry in our series, Minneapolis and St. Paul, where the seasonal chill of the polar vortex on the area's hot housing market is lifting with the spring thaw.
See what other cities made our Top Real Estate Markets list.