If you’re looking for a different kind of good news in the market, you can find it from this Housing Views analysis of the flow-of-funds data from the Federal Reserve. It finds that, nationally, home equity wealth is at a high. What that means is that the money owners could turn on selling their homes, after paying off their mortgage, is at a high. Given that less than a decade ago a startling percentage of homeowners had negative equity, meaning the amount they owed on their mortgages was more than they could get if they sold their house, that’s actually pretty great news. The analysis is looking at the whole country, so of course there will be local differences, and some areas do still have an unhealthy level of low and negative equity wealth, but it’s nice to see a national trend that indicates home owners are in a fairly comfortable situation, relatively independent of what the market will pay for their homes.
In more local news, the Seattle City Council passed a tax on short term rentals. It’s not yet active and the implementation details are still forthcoming, but it’s a measure explicitly meant to target the Air BnB market. The fund will go toward affordable housing, which is handy. It’ll be something investors in the local market will want to watch, though I suspect it isn’t going to have a significant impact on revenue for the AirBnB crowd.
Perhaps related to the previous news item, Curbed Seattle pulled out the locally relevant bits of an Apartment List report. According to it, nearly half the renters in the Seattle area were cost burdened, meaning they spent more than 30% of their income on housing. That 30% figure is the magic number that a healthy budget spends on housing, and is what banks use as a target when deciding how much of a mortgage you qualify for. The article does a good job of putting the numbers in context, both nationally and historically, so I’d suggest checking it out.
The NWMLS numbers are out, and the exciting news from last week was real. Inventory in June really truly did go up. Now, let’s all cross our fingers for a a repeat performance in July.
Data from the large rental listing sites on July rent changes in the area is out, and Curbed has handily compiled it here. Most of the numbers are comparing median one-bedroom rent listing prices to the same for July of 2016, and saw increases from 4-6%, but one of the sites actually reported a decrease of 17%. Because nothing is every quite as straightforward as you might hope.
Speaking of straightforward, the city of Seattle has passed an income tax on high-earners, to be implement in income earned beginning January of 2018, collected in April of 2019. The tax is intended to, in part, lower the burden of property taxes, which is good news for a lot of people. Rules around the tax are still in development and should be released in November.
2016 is out like a gone thing and 2017 is here. The weather is downright chilly, but from what I can see, the market hasn’t really noticed. We had a couple quieter weeks there in December, but things are picking right back up now that the holidays are over. It’s going to be an interesting year.
If you feel like the Seattle market was particularly adventurous last year, you aren’t wrong. The October numbers from Case – Shiller show Seattle with a 10.7% year-over-year increase in housing prices. That’s great for sellers, and while it could be rough for potential investors, it comes at the same time we’re continuing to have the biggest rent increases in the country. Potential first time buyers are the ones who are going to have the hardest time this year, but with their rent going up, it’s looking like a choice between the proverbial rock and hard place.
My resolutions for this year involve teaching more seminars, talking to more people, and petting more cats. I’d resolve to drink more tea, but I think I’m already fairly close to peak tea consumption.
What does 2017 portend for you?
Last Thursday evening I braved the (not-yet-existent) snow storm to go to the Housing is a Human Right panel hosted at the Seattle Central Library. It had a really good mix of panelists; Sandra McNeill from T.R.U.S.T. South LA, Elena Perian from the Benson East Support Group Board (a community in Kent), Andy Reicher from the Urban Homsteading Asstance Board (based in New York), and Wyking Garrett from the Africatown-Central District Preservation & Development Association (in Seattle). The panel was hosted by Mike O’Brien from the Seattle city Council, and Rebecca Saldaña from Puget Sound Sage.
The discussion gave a really good overview of some of the projects going on in and around Seattle, and putting those in context with approaches finding success in other cities. With Seattle and King County’s huge homelessness problem, and the difficulty in finding affordable housing (to rent or own) in the city, these are issues I’m particularly interested in.
Unsurprisingly, I found Wyking and Elena’s contributions to the panel the most exciting. They both shared stories of successes they’ve had with their work so far, and plans for future projects that seem like excellent options to have in Seattle’s housing development mix. With inventory in the area remaining extremely tight and the natural effects that’s having on the market, it’s great to see efforts targeted toward helping people stay where they are and retain ownership in their communities. Real estate is all about location, location, location, but healthy, strong communities are a lot of what makes a location.
The even capped off a year of discussion on the “housing is a human right” theme and was recorded for a podcast, so if you’re interested, keep an eye out for that. I highly recommend it, whether your interest is in housing, models of property ownership, or development in the Puget Sound region.
You may have noticed the site looks a little different today. That’s because I’ve moved! Well, moved brokerages. I’m now working with WP & Associates, and I’m pretty excited about the change. Their main office is based in Bellevue, but that’s not going to change my focus. If anything, I expect working with them will make it easier for me to focus on the important parts of the business – taking care of my clients, staying informed, and petting cats – so the only difference anybody else will see is a change in logo and an increase in awesome.
Super busy this week, but I made it out for a quick tour today. I snagged a ride on the 49 to take a look at some properties at the north end of the neighborhood. Today was a great day for properties with a view – lots of dramatic clouds over the water with piercing sunlight.
One of the upsides, for me, of touring Capitol Hill is that at this point, I know a lot of the other brokers who work the area. Touring means we can swap stories about how the market is doing, and check in on transactions and clients we wouldn’t otherwise hear about. One the tour properties I visited today was being held open by an agent who very generously shared a ton of information about co-ops and how they work, way back when I first moved to the Seattle market. I had virtually zero chance of bringing a buyer to her, but she spent time with me anyway. That was an area where I didn’t even know there was information for me to look into – co-ops in Seattle aren’t like co-ops elsewhere. It was a big kindness and very welcoming experience to have early on. Today I got to see another of her listings and pay that back a bit with feedback based on what I’m seeing with my buyers. That’s a good day.
Location: Capitol Hill
Time: 1 hour
Transit modes: Bus, foot
Cats petted: 0
Tea consumed: Hot cider
Properties Viewed: 3
This time of year, any day that’s a bikable day is worth snagging, and I snagged this one. It was still a bit drizzly when I headed out, but that cleared up and it wound up being a nice day. I saw five properties, all of them relatively easy to get to via bike from the Burke-Gilman trail. Not gonna lie, that trail is probably my favorite stretch of bikeable territory in the city, so that made abandoning the office for a few hours even more appealing.
Here’s hoping there are more such days as the season wears on.
Location: University District, Fremont, Ballard
Time: 2.5 hours
Transit modes: Bike, train
Cats petted: 0
Tea consumed: N/A
Properties Viewed: 5
Client needs meant I snagged a car anyway, and while I had it, I dashed out for tour on Queen Anne. This is the one part of town where even my boundless enthusiasm can’t quite overcome the conveniences a car provides. Lots of divided streets that don’t share elevations, lots of extremely steep streets that are, for me, unbikable. Which is a shame because Queen Anne is gorgeous, with some of the best views in the city, and toodling around on foot would be great fun. I’m still determine to pull this off without catastrophe someday, but this week didn’t bring that day. I did see some really great properties, though. The best part: a couple of them have been on the market for a little while. That’s an opportunity for buyers that’s been in short supply for a long time.
Location: Queen Anne
Time: 2 hours
Transit modes: Car
Cats petted: 0
Tea consumed: Oriental Beauty, hot
Properties Viewed: 6
The sun is shining and I shamelessly abandoned the office for a lunch time tour. I hopped on the train, took it down to Pioneer Square, then worked my way north until I was at Westlake station. Back on the train and back to work. That netted me visits to five properties and some spectacularly great views of downtown and the sound. It was a really great Tuesday tour, and I’m not just saying that because it didn’t involve Queen Anne.
The takeaway theme for today was, “Isn’t this a great balcony? It’ll be quieter, of course, when they finish work on the viaduct.” Someday!
Location: Pioneer Square, Downtown
Time: 2 hours
Transit modes: Train, feet
Cats petted: 0
Tea consumed: Ice black tea with basil
Properties Viewed: 5
I was just getting back into a streak when, out of nowhere, Jury Summons!
Actually, it wasn’t very out of nowhere. I was summoned in August, replied with a, “Hahaha, no, try October,” and they obliged. Nevertheless, it means I spent my property tour time this week hanging out at the Federal courthouse and raising a laminated placard with a number on it.
And now, rainpocalypse! I love autumn. I’m just hoping my office keeps power long enough for me to wrap up everything on the to do list.
Next week, though, we’re touring some things.