The COVID-19 pandemic delivered heavy blows to various industry verticals all over the world, but the Northwest’s real estate market seems to be one of the few areas that actually thrived while the world came to a halt.
According to the Northwest Multiple Listing Service, the entire region recorded 3.58B in closed sales in February of this year, wth 3.14B closed sales for residential homes, and 443M in closed sales for condominiums. Similarly, median sales price went up by 11.8%, compared to last year, at $625,020. Median closed price for residential homes and condos also increased by 15.1% this year, compared to February 2020.
There are many factors that account for these numbers. First off, the pandemic slowed down buying for many people, and home sellers also decided to take their properties off of listings. This created an imbalanced dynamic between supply and demand, which led to increases in median sales price; some types of properties sold quicker than others, and buyers were quick to snatch the few available listings.
In Seattle, home prices have been rising steadily since late 2019, and the pandemic only exacerbated the increase in median prices. This year, more of the same can be anticipated, as inventory continues to be low while buyer demand rises. In fact, according to new data published by the Northwest Multiple Listing Service, King county (where Seattle is located) only has about 0.92 months of inventory, which is insufficient to accommodate the volume and pace of home buyers.
However, low interest rates are spurring buyers to take quick action and snatch up available properties. Current data on Seattle’s housing market says that as of February of 2021, there were 831 closed sales registered in Seattle, which bring a year-over-year increase of 29.24% from February of last year. Additionally, pending sales in the area as of last month amounted to 1,079, a 19.62% increase from the same month last year.
Seattle’s median price for residential properties also increased by 5.19% to $710,000. Last year, the median price in Seattle was only $675,000. With only 1.26 months of inventory, its real estate market strongly favors home sellers.
Home buyers will have something good to look forward to this spring, though, as active listings from last month rose by 27.44% compared to February 2020, and now sit at 1.045. New listings have also recorded a 7.6% increase from February 2020 to February 2021, as 1,070 properties were newly listed in the market within Seattle’s boundaries.
2021 Forecast for the Seattle Real Estate Market
Seattle’s housing market has enjoyed home appreciation rates since 2012, when inventory dropped so dramatically and prices started to surge. Then in 2018, home values dipped until November of 2019. Then 2020 rolled in and brought prices up, which continues to this day.
According to NeighborhoodScout.com, Seattle is in the top 10% in the entire United States for real estate appreciation. In fact, over the past 10 years, the website recorded an increase of 88.05% in appreciation in the area, with an annual average growth at 6.52%. Zillow also says that since 2012, the median home price in Seattle increased from $368,000 to $816,718, at a whopping rate of almost 122%.
Over the past year, Seattle’s home appreciation rates have not been as astounding, but stayed nevertheless positive. In the latest quarter, homes appreciated by an average of 2.17%, which puts sellers at a great advantage. Experts predict that home prices in the region will go up by 7 to 9 percent in the next 12 months. Realtor.com supports this, putting Seattle as the fifth housing market, among 100 metropolitan areas in the country, to rack up percentage increases in both sales and price growth.
Theories about urban exodus do not seem to be gaining ground, as well, in the real world. When COVID-19 hit, there were talks of people moving out of densely populated cities into suburban areas, and Seattle, being one of the biggest metros in the country, may feel its effect on its housing market. However, data from United Van Lines found that among people moving out of San Francisco, the top destination where they moved into was Seattle.
Why Invest in Seattle?
Investing in one of Seattle’s available properties is a sure way of cashing in on positive returns, in the long run. As one of the most expensive housing markets in the country, whatever you spend on a house or a condo will be rewarded, as home prices are projected to only grow in the future.
If you are selling, 76% of homes in Seattle sell in the first 30 days; in fact, the average period for a listing to be closed is only 21 days. And if you are buying, interest rates are at a record-low at the moment, and new listings in the next few months are expected to get added to the metro’s housing inventory.
Additionally, there are a lot of motivating factors that can assure you of a worthy investment, such as the following.
Strong Housing Demand
Seattle has long been considered as a backup to Silicon Valley, as tech companies have either set up shop in the metro or put up outposts. Over the last decade, for instance, Amazon – which traces its roots to Seattle – has grown from having 4,000 employees to more than 45,000. Around the same period, 535,000 homes were sold in the Seattle metropolitan area.
That is a number that is up by 41% compared to closed sales in the San Diego metro area. And as housing projects continue to concentrate within the city center, demand for housing in the Seattle metro area can only be expected to stay strong, or get even stronger.
Accommodating Business Climate
Seattle also imposes lower taxes on businesses, compared to a lot of other metropolitan areas in the country. This makes it an attractive destination for both business owners and professionals who do not wish to keep on getting billed for high income taxes.
Skilled Tech Labor Market
Seattle is also expanding its tech horizons, with companies like Facebook and Google investing in the city. With the growing number of people moving into the city compounded by the already available labor force, projections for development and growth in the area remain to be positive. This continuing of people getting hired by tech companies makes housing a viable investment option.
Landlord-friendly Rental Market
If you ever want to put up your property for rent, Seattle has landlord-friendly policies that will guarantee consistent returns on your investment. One example of this is the absence of a rent control mechanism, which makes it possible for property owners to raise rent on their spaces. Additionally, Seattle’s growing population ensures that some people will always be looking for places to rent.
Where to Buy Seattle Investment Properties
To make the most out of Seattle property investments, it pays to know which types of properties to go for, first and foremost. According to NeighorhoodScout.com, the most common housing types in Seattle are large apartment complexes or high-rise apartments; they account for as much as 47% of the housing units in the city.
Other popular housing include single-family detached homes, duplexes, small apartment buildings, and some row houses and attached homes. Residents typically live in properties with two or fewer bedrooms, which are predominantly found in high-rise buildings or big complexes.
Home appreciation rates in Seattle have been some of the highest in the whole country over the past decade. In fact, it is in the top 10 percent, nationally, in terms of real estate appreciation. Some of the neighborhoods with the highest appreciation rates in the area since 2000 are as follows:
- James St / Boren Ave
- Antioch U-Seattle / 4th Ave
- Cornish College of the Arts / Stewart St
- Mars Hill Graduate School / Elliott Ave
- 12Th Ave S / S King St
- Boren Ave / Madison St
- Seattle Community College-Central Campus / Broadway
- Seattle U / 12Th Ave
- E Jefferson St / 20th Ave
- Queen Anne Ave N / Boston St
Additionally, some of the most expensive neighborhoods that you can find in Seattle are:
- Edgewater Park / Broadmoor
- E Roy St / 24th Ave E
- Queen Anne
- Lake Washington Blvd E / Boyer Ave E
- Magnolia Blvd W / 36th Ave W
- Lake Washington Blvd / E Terrace St
- Queen Anne Ave N / Boston St
- 10th Ave E / E Roy St
- 1st Ave / Stewart St
It is also a good idea to invest in neighborhoods that are considered safe. According to NeighborhoodScout.com, in Seattle, these would be:
- Magnolia Blvd W / 36th Ave W
- 3rd Ave NW / NW 125th St
- Queen Anne
- Bryn Mawr
- Lake Washington Blvd E / Boyer Ave E
- 28th Ave SW / SW 102nd St
- NE 70th St / 39th Ave NE
- E Roy St / 24th Ave E
- Lake City
Neighborhoods in close proximity to good schools are also recommended. Some of the best Seattle areas for education are:
- 5th Ave NE / NE 53rd St
- 20th Ave NE / NE 50th St
- N 50th St / Stone Way N
- 11Th Ave NE / NE 50th St
- Aurora Ave N / N 46th St
- N 36th St / N Northlake Way
- Meridian Ave N / N 50th St
To kick-start your selection, this exquisite estate that is 11,271 sq ft in size and offers magnificent views of Lake Washington can be yours for 27.5M dollars! Designed to honor its historic past, this single family home has redesigned into its modern-day iteration, replete with its luxury waterfront theme. Calling this property home will treat you to amazing exterior spaces, including a new dock, to kick back and enjoy sweeping views of the Mt. Rainier and Cascade Mountain.
If you want condo living, this 4-bedroom and 4-bath penthouse in Spring Street offers nearly 7000 square feet of beautiful space that accords 360-degree views of the entire city, as well as its surrounding mountains. This space was designed by an award-winning team, and every bit of its floor plan can be customized to your heart’s desire. It also comes with luxe features, such as 3 en-suite bedrooms, an executive library, and a private exercise center. All yours for 13.5M dollars, this property is inside Seattle’s highest residential peak.
If it’s a mansion you’re looking for, this Queen Anne one was originally built for Seafirst Bank founder W.J. Whitney, as his gift to his daughter, and now overlooks a part of the city that has grown into Met Seattle. Sitting at the highest peak, you can entertain your guest at the 3rd floor suite, with its bar, dining area, sitting area, and 210° panoramic views. It comes with 5 beds and 2 baths for 8.7M dollars.
Selling or Buying a Home in Seattle
Buying a home in Seattle is one of the best investment decisions that you can make right now. With low interest rates and a projected influx of new listings, there is no better time to land a good deal. To make the process satisfactory and successful, here are some tips.
Prepare your financial requirements. Getting a mortgage loan approved is one of the most important things that you’d need to do to buy a house, and there are a few requisites that you will need to deliver to ensure the success of your application. These include having a good credit score, and having an appealing debt to income ratio. If these are things that you still need to work on, make sure that you do before you lodge your application.
It is also important to prepare your down payment. Most traditional home loans require a downpayment of at least 20% of the home’s total cost.
Know what you want. What are the things that your home must absolutely have? For home buyers, it is absolutely necessary to define the things that you will need, such as proximity to good schools, safety, or other essential factors. Doing this will also help you steer clear of options that seem attractive because they have things that you would prefer to have, but do not necessarily offer the things that you need.
In addition, knowing what you want will help facilitate a speedier selection process. Since you can filter results according to certain parameters, it will be faster to streamline your search according to your specific requirements.
Go on a virtual house tour. Since the pandemic has affected house showings, the next best way to gain a close look at your prospective new home is to tour it virtually. This will allow you to better gauge whether the house is suited to your needs, as well as find out more information about it straight from the seller.
Don’t forget to ask the home seller about important details such as the maintenance needs of the property, its current state, and future possible repair needs. You can also gain more insight about the neighborhood through the virtual tour, which will better inform your decision making.
Prepare your pitch. This is one of the most critical points in the process of buying a home in Seattle. As inventories struggle to meet buyer demand, chances are your seller will be receiving multiple offers; to gain competitive advantage over other home buyers, your pitch should be strong.
Some of the things that you can do make an irresistible offer are:
- the seller that you can pay in cash, if it is within your capacity.
- Submit a pre-approval letter from your mortgage lender to communicate your paying capacity.
- Be as accommodating as possible, especially in terms of meeting your seller’s terms.
- Release Earnest Money Early
- Offer Rent Back
Hire a good real estate agent. Also, get professional help from someone who knows how to navigate the Seattle real estate market well. The ideal agent is someone who specializes in the specific area, as well as some surrounding communities, as they would be able to offer localized knowledge that can guide you towards the best results.
Additionally, a seasoned agent will know what to anticipate during the process, and thus help equip you with what you need to know so that you can prepare well for any aspect of home buying.
Jennifer Michaels, a top broker at Inspire Properties, is one such professional. Offering almost 15 years of experience in the industry, she has worked with some of the most established brands in real estate, and can work well with both first-time buyers and seasoned investors or sellers. She also comes with a vast network of resources and trusted partnerships, which helps her clients close deals successfully. As a Seattle native, she can bring you personalized guidance to find your Seattle home or condo.
Clients also have nothing but positive words to say about her. Robert Clark says: “Aside from being professional and experienced, Jennifer proved to be very patient, creative.” George Miller also added, “Jennifer’s local market knowledge, expertise, and amazing dedication made the whole buying process truly enjoyable.”