I just have two links for you this. The first is this article which has been passed around pretty extensively amongst the local real estate folks. Everybody likes rose-colored glasses, and this article is tinted pink like a Tiffany window. Most of the quotes from Matthew Gardner demonstrate a finely crafted ability to look at selected pieces of the big picture and take comfort. If you like that comfort, stop there.
If you’d prefer a broader take, you might want to click through to The Seattle Bubble’s response to the article. Tim isn’t willing to say that we’re in a bubble, and he’s more qualified on economics and stats than me, but I’m pretty comfortable coming down on the side of saying yes Seattle is definitely in a bubble. We’re still at the beginning of it, but looking at our market numbers compared to the national trends, we’re outstripping national averages by more than can be justified by local economic forces. Unemployment is down and inventory is low everywhere, but Seattle is having a unique response, and I don’t think it’s a sustainable one.
What that means for people looking at buying or selling in the local market will depend on the individual, but broadly speaking, if you want to buy in the next 1-3 years, now is probably better than waiting, and if you want to sell, now’s good. Next year will be too. The year after that is probably good, but I’m not comfy with predicting continued growth beyond there at this point in time. Recognizing a bubble and behaving accordingly is savvy. Forgetting that bubbles burst isn’t.
Comments are open for proposed zoning changes that would allow ADU (Accessory Dwelling Units) and backyard cottages in Seattle. It’s a tiny step toward fixing a large housing problem, but enough tiny steps add up. I suspect permitting ADUs is a much more palatable route to the city’s single-family home dire hards than some of the other density proposals out there, including abolishing single-family-zoning entirely.
We finally have approved building designs for the Capitol Hill station, the development to go above the light rail station that opened last year. The station opened early, but breaking ground on the accompanying development has taken its own sweet time, and we aren’t there yet. This will add inventory to the apartment market in Capitol Hill, which is a good thing, and create community space with extremely easy access from outside the neighborhood, which is also good; having people in Capitol Hill for something other than the night life is always a good thing.
And in case you were wondering why people are concerned about wanting more inventory on the market, or whether it’s had any effect, it looks like the cost of living in Seattle is up to $75,000 per year, and a lot of that is due to the cost of housing.
The Seattle Times has had some good real estate coverage if you’re looking to get a feel for the flavor of the market. One is a behind-the-scenes look at the negotiation for a house in West Seattle. Another is a compilation of Mike Rosenberg’s reddit AMA on the local market and housing in general.
The Puget Sound Business journal dug into demolition and construction permits to find the areas of the city that are the hottest for teardowns and the answer isn’t surprising: Ballard is the winner. Of the hot neighborhoods in Seattle, it’s the one with the largest inventory of property that hasn’t been through an upgrade cycle or wasn’t built to the top of the market in the first place, so teardown activity now makes sense.
The Seattle Bubble appears to be running out of headlines for the perpetual sameness we’re seeing with the latest market numbers. I’m sympathetic to the sentiment, though I think Tim and the NWMLS both missed the important takeaway from the data indicating that more houses are sitting on the market past their review date and other listings having price reductions: it means that marketing a property does still matter and buyers aren’t literally buying anything. That’s good news of a sort, if you’re willing to strain for it. It means things can still get worse.
Lots of news about the rental market this week, and not terribly consistent news, either. On the one hand, according to the Puget Sound Business Journal, vacancies are up, though they attribute the increase to new units entering the market. Meanwhile, median rents are up once again, across all the various places that calculate it.
Everybody who was worried that the news about Amazon’s hunt for a location to set up a second HQ spelled the end of the cushy Amazon-Seattle relationship can comfort themselves with the news that Amazon isn’t finished growing in Seattle. They already represented a significant portion of the office space tenancy downtown, and now they’ve signed a lease agreement for huge chunk of the Rainier Square project. I’m skeptical about the wisdom in facing the fragility inherent in being dependent on a single company by throwing in with that single company harder, but it is hard to say no to the opportunities Amazon offers.
At least if somebody other than Amazon wants to move in, they’re likely to have the space to do it. The Uptown/Lower Queen Anne rezoning passed, so the area will be eligible for taller buildings. Every neighborhood up for review so far has passed which is a promising trend both for increasing density in Seattle and putting the prospect of affordable housing on the horizon.