Q1 prices in the Seattle-Eastside region have escalated yet again with no sign of slowing in the immediate future. An unprecedented lack of inventory for sale coupled with rising interest rates has prompted buyers to compete with reckless abandon to win the prize of their very own home, albeit with a steep price tag.
Overall median prices in Seattle rose 16.1% to $770,000, while the Eastside rose 13.0% to $944,000. Those regional numbers certainly don’t tell the whole story, especially when you consider the highest change in median sale price was nearly 46% and the lowest was a -4%. New construction sales, or lack thereof, made the biggest impact on home sale prices. Existing homes, offering good walkability or commute options, and those that were on the more affordable end of the pricing spectrum saw the strongest appreciation overall.
Rising mortgage interest rates, now up a full percentage point from their lows, are adding fuel to the fire. While not dampening buyer demand yet, further increases will likely begin to price home buyers out of the core Seattle-Eastside region. Homebuyer fear of being priced out of the market is at least partly to blame for the crazed demand at more modest price points.
As predicted, many who don’t have a need to be close in to the metro region are choosing to sell at a high and buy more affordably outside of the Seattle-Eastside area. The rate of tear-down new construction infill has escalated at staggering numbers as builders capitalize on the market’s appetite for fresh and new.
Buyers today should consider their purchase thoughtfully as buying at or near the peak of the market can limit their resale options when the market corrects. Planning to stay put for five to seven years is a good strategy at this time.
West Seattle leads the pack in median home price growth on the Seattle side of the lake. With its vibrant, hip vibe and convenient access to the city, West Seattle has benefited from Seattle’s commute gridlock—maintaining status quo while other Seattle neighborhoods have come to a halt (literally).
Queen Anne saw a nice rebound in Q1 after lagging the Seattle averages for some time. South Seattle, with its light rail access, affordable prices, and new vitality, continues to see its real estate market thrive.
Click here to view the complete report for a neighborhood by neighborhood breakdown of Average Sale Price, size, and number of homes sold.
Significant new home development at higher price points has led the market in West Bellevue and Kirkland and brought up everything else along with it.
With land values alone higher than average home sale prices in surrounding communities, this growth will have long-lasting impacts that will forever change the flavor of these communities–for better (fresh new housing stock) and worse (the lack of affordable options). Kirkland led this charge with a median sale price 45.9% higher than Q1 last year, followed by West Bellevue at 23.1%.
Click here for the full report and neighborhood-by-neighborhood statistics!
Overall, a much higher percentage of mid-range homes sold in the first quarter than in quarters past, giving the appearance of falling prices. In reality, however, it was actually a downward shift of the segment of the market that is selling.
Don’t let the negative number for Q1 fool you. The market below the two-million-dollar mark is vastly different than the market above it. With the most severe shortage of available homes in mid-range price points Mercer Island has seen, especially early in Q1 this year, the sub $2 million market has been brisk and competitive with strong price escalation. The $2 million and above market has been a different story altogether. While highly desirable homes in that bracket have transacted quickly, many other less notable homes have languished on the market.
Click here to view the complete report for a neighborhood by neighborhood breakdown of Average Sale Price, size, and number of homes sold.
CONDOS – SEATTLE & EASTSIDE
Still the only affordable option for many home buyers today, condos have continued to escalate in value with appreciation rates above those of residential homes in many areas.
On the Eastside, new condo and townhome developments in Crossroads and Rose Hill drove prices up to new highs in those communities. Richmond Beach and Shoreline benefited from an infusion of new construction standalone condominium ‘homes’ on very small lots.
Check out all of these factoids and more in the full condo report.
Several significant sales accented an otherwise unremarkable quarter. A $26.8 million iconic Medina estate on 2.5 acres with 150 feet of waterfront set a new benchmark on the Eastside. Two $8+ million homes on the north end of Mercer Island–both newer construction with over 7,000 square feet–set the tone for the Island in 2018. Lake Sammamish, with a $4.2 million sale in Q1, is still in hot demand, while Seattle saw only three modest waterfront sales.
Check out the full Waterfront Report for a complete list of waterfront home sales by address and community.
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© Copyright 2018, Windermere Real Estate/Mercer Island. Information and statistics derived from Northwest Multiple Listing Service and deemed accurate but not guaranteed.v
When you hear of a city that is “something between an urban jungle and the classic picture of suburbia,” Bellevue may not be the first place that comes to mind. However, that’s exactly how one young couple describes downtown Bellevue in a recent article from The Seattle Times – and they aren’t the only ones.
When and how did downtown Bellevue transform into a dense, urban, mini-Seattle?
According to the article, downtown Bellevue is the fastest-growing neighborhood in the city, so much like the growth in Seattle it happened fairly quickly. Most of it has occurred over the past four years as developers have built more than a dozen new apartment projects in the neighborhood – and more are in the works. Permit data from the city shows that since the latest development cycle began in 2013, downtown has seen $800 million worth of new projects come up and $100 million more about to begin.
The current wave of projects is a little different than the last. This time the surge is mostly apartments, which are seen as a safer investment, but at least two companies are planning the city’s first new condos in a decade. Additionally, office construction in this current development cycle has added 1.5 million square feet of office space to downtown, most of which has already been leased.
Residents of downtown have been experiencing the effects of this growth and they are welcoming some changes more than others. Millennials are starting to think of downtown Bellevue as a lively, energetic, interesting neighborhood and residents and visitors have given the area high marks for safety and cleanliness. Less welcome changes include added gridlock on the roads and an increase in housing costs.
Luckily, our region is no stranger to adjusting to expansion so the future of Bellevue looks bright.
Read the full article from The Seattle Times.
Architects are often referred to as optimists. They envision a city’s future and plan for it. That kind of optimism is incredibly important for the Seattle area real estate market as the city works to accommodate widespread growth. According to New York architect Vishaan Chakrabarti, who recently spoke at the Downtown Seattle Association’s annual breakfast meeting, Seattle’s conditions are perfect for becoming a futuristic city.
What is a futuristic city?
Chakrabarti describes this type of city as dense, walkable, and mixed. It uses less land and has fewer old-school office parks. It encourages people to live in more compact circumstances and has a more dense way of living that is largely rail-based. It fosters relationships and innovation. It calls for massive investment in infrastructure to support cities via transportation nodes, safety, parks, cultural activities, and affordable housing.
Based on this description it seems as if Seattle is already well on its way to becoming a futuristic city. For example, an article from Curbed reported the Housing and Livability Agenda (HALA) will rezone Seattle neighborhoods to be taller near Light Rail stations and gradually return to conventional houses as the distance to the stations increases. This change is expected to affect the density of the entire region, including the Eastside.
However, considering the rate of growth in the region it has taken quite a while to get to this point. Other trends characteristic of a futuristic city, like compact housing (i.e. tiny houses), have been on Seattle’s radar for a while, but when they first appeared it seemed as if people sought them out due to preference or in the pursuit of personal fulfillment. Now we are looking to this city landscape with more urgency, and as a much-needed solution and way of sustaining our city.
Why does Seattle need to be a futuristic city?
According to Chakrabarti the answer to this question is the answer to most questions pertaining to Seattle’s rapid growth: Amazon.com. One year ago 245,000 people were employed in downtown Seattle. That number is now up to 265,000 and more than 25,000 of those people are Amazon employees. This is contributing to the reshaping of Seattle and surrounding areas in tangible ways – the record-number of cranes dotting our skyline, traffic congestion and longer commute times, and of course “razor thin” housing inventory.
What are the economic and social benefits?
Chakrabarti states, “As people live in denser circumstances, more innovation happens, more patent creation happens, and it is because people are running into each other, and there is serendipity as a consequence.” We are already the third most innovative state in the U.S. and third in patent activity so it would be interesting to discover how much more creation and innovation could result from a full transformation into a futuristic city.
There are also several social benefits to living in this type of urban development. Drinking and driving plummets, childhood obesity rates drop, and divorce rates go down as commute times are reduced.
There is no doubt that Seattle is growing up, and quickly. No matter what it becomes I will be happy to assist you with navigating the real estate market during the process.
All of the statistics and speculation surrounding our local housing market could be summarized by one basic economic principle – supply and demand. We simply have not had enough homes, among other resources, to accommodate the rapid growth in our region. However, Puget Sound Business Journal (PSBJ) recently reported there is hope ahead in the form of several big condo projects in Bellevue and Seattle.
At the beginning of December Windermere’s Chief Economist Matthew Gardner offered some predictions for the 2017 housing forecast. According to his outlook, “In the coming year, there should be a modest increase in the number of homes for sale in most major West Coast markets, which should relieve some of the pressure.”
These five – possibly six – developments will certainly help support his prediction. According to PSBJ buildings will range in size and unit prices will vary; however, all but one have at least one thing in common – developers from China or Canada. This could indicate that foreign investors that became ubiquitous in 2016 will maintain a strong presence in our real estate market in 2017.
How many units will these projects bring to Bellevue and Seattle?
The PSBJ is reporting these projects will add somewhere between 1,400 and 1,680 units. Keep in mind this number of new units to our region does not include other mixed-use developments that are underway, such as the Totem Lake redevelopment and Kirkland Urban.
The last cycle of additions was nine years ago when there were 3,765 condo units under construction in the greater downtown Seattle area alone. Since then only two major projects have been built in Seattle.
This resurgence of projects is a sign of how quickly local real estate is adapting to keep up with continued growth in our area. I am always working to ensure I stay up-to-date on the most relevant news to help you navigate the market, so reach out to me so I can put my knowledge to work for you!
2016 has been quite a year to live in the Pacific Northwest, especially if you spent some or most of it in the housing market. This year’s market was truly unique, record-breaking, and game-changing (see: Windermere’s W Collection). To close out the year here are a few of the most noteworthy Seattle-area superlatives related to real estate – and a few confirming just how lucky we are to live in this beautiful pocket of the world.
Nation’s Hottest Housing Market
Let’s get straight to the point – this year Seattle was named the hottest housing market in the nation! According to Geekwire home prices in our region rose 11 percent between September 2015 and 2016, putting us ahead of Portland for year-over-year growth.
We owe much of this recognition to our booming tech industry, which has been bringing people to the Seattle area in droves. “Droves” refers to the 86,320 residents (and counting) who moved to Greater Seattle between April 2015 and 2016, marking the region’s biggest population gain this century.
Many of these thousands of people who flocked here for tech jobs were probably also considering other tech hubs, but we were more alluring because tech salaries in the Seattle area are among the highest in the U.S. after cost of living adjustments. That means their salaries go much farther here than other tech towns, such as San Francisco, enabling them to have a better quality of life.
The Region’s Largest Property Sale
Of all of the multi-million dollar property sales in our region the largest was the 50-story Safeco Plaza in Seattle, which sold for $387 million. The buyer was a Munich-based company that had previously acquired an Amazon-occupied property in the thriving South Lake Union neighborhood.
Eastside’s Biggest Property Sale
The Seattle Times recently reported a pair of investors from the United States and China bought a major office complex in Bellevue for $202.2 million, making it the biggest transaction on the Eastside this year. The three-building, 480,000 sq. foot complex is fully leased and will be home to tenants such as BitTitan and CenturyLink.
Seattle No. 1 Choice for Foreign Investors
What’s one important thing buyers of both of these properties had in common? They were foreign investors. This year Seattle became the No. 1 choice for foreign investors after British Columbia enacted a 15 percent tax on foreign buyers in August, causing them to redirect their real estate searches to the Seattle area. To quantify this impact, as of November, Chinese money accounted for about 55 percent of all homes purchased by foreign investors in Washington.
Seattle No. 1 Place to Live If You Love Spending Time Outdoors
While this last ranking isn’t directly related to real estate, it’s definitely worth boasting about! Six Washington cities made Business Insider’s list of “25 beautiful US cities to live in if you love spending time outdoors.” Seattle topped the list and Bellevue came in at No. 5. Every day we are surrounded by the beauty of trees, mountains, and water with endless opportunities and ways to enjoy them.