I was just singing the Seattle Bubble’s praises, but I’m going to do it again. They’ve put up an analysis of housing affordability in the area, with adjustments for what the index would be with different interest rates. I highly recommend reading the article as a whole, less for its information about affordability rates in the area, and more because it winds up being a very useful discussion of interest rates, where the current rates fall in comparison to historical norms, and the potential affect they can have on the market. With affordability reaching for historical lows and interest rates creeping back toward more normal ranges, the rising interest rates could put some pressure against rising prices in many markets. I don’t foresee it having much of an impact on that front in the Seattle market since we have plenty of cash, and high-cash buyers who can avoid or mitigate those effects, but it could start to affect national trends which will, eventually play into the Seattle market.
If you’ve been paying attention to the upzoning going on around the city as part HALA, then you’ll be wanting to pay attention to the next neighborhood up for review: the International District. And not just because increased density in that neighborhood might increase floorspace for tea shops. (Though, in my opinion, that’s a very good reason to pay attention.) The two neighborhoods that have already been through review had unanimous approval, but they were also, arguably, the least controversial choices. There was small but significant opposition to the downtown plan because many activists wanted an increase in the Mandatory Housing Affordability component of the downtown plan, the opposite of the NIMBY trend expected in most neighborhoods, but overall these were straightforward approvals. The International District is a different creature altogether, and relatively unique in the city, too. Paying attention to the conversations going on during its review could be enlightening about what to expect as HALA approvals move into more controversial parts of the city.
And a final farewell to Bertha. After many years, many breakages, and a lot of disappointment, she’s finished her job and gotten dismantled. SDOT has continued their support for webcam curiosity and has a video up to let you see the giant drill head for her final resting place. (She’s mostly getting recycled.)
Last week we talked about the news that rent hikes might be getting smaller. Smaller hikes isn’t the same as smaller rents, though. Zillow just published a handy calculator that will help you figure out what level of raise you need in order to cover your anticipated rent increase.
Some of the news in this article about properties going above listing price won’t be terribly surprising, but if you thought the hot market was limited to the Seattle city limits, you’ll want to read past the fold. The percent of properties in Redmond going over list is big enough to make Seattle’s numbers look reasonable. The eastside in general is cooking up a storm, pressing buyers in the area who need “affordable” even more tightly into the North/South corridor around the city.
Bertha broke through, but we’re not quite done talking about her. SDOT made a video so you could watch the accomplishment. If you’ve ever wondered what the world’s largest boring machine looks like when it finishes a job, now you can find out.
If you’re a data nerd at all, you should probably be reading the Seattle Bubble on your own regularly, because their analysis is great. For example, they dug into the January data from the Case-Shiller index and look at more than just price growth in Seattle, but give good context for how it compares to other rapidly growing metropolitan areas including, important to the Seattle market, San Francisco. With as much interest as we get from Bay Area investors, a softening in the market there is likely to have an impact on the Seattle market (though probably not a huge one unless it was part of something bigger) so it’s something worth keeping an eye on.
There’s more evidence that trends in rent prices from the last several years might be shifting. A slow down in increases isn’t remotely the same as rents going down, but it’s still good news as far as I’m concerned. With upzoning approvals around the city already rolling in, and plenty more in the pipeline, hopefully the next few years will bring a slow down in rent hikes across the city. We’re at a place where rents are high enough to keep the market happy to build new inventory for quite a while; stabilizing things will let buyers be more thoughtful about their choices in jumping ship to buy, hopefully easing some of the inventory trouble we’re having and shoring up against the kind of frenzy that would tilt us toward a burst-ready bubble. (I started in the industry right after the last bubble burst. It was fun to be a buyer’s agent then, but I’m not eager to go back to it.) In summary: Yay, less exorbitant rent hikes!
Speaking of pipelines: Bertha made it! Yo go, you tardy, over budget girl. I must confess, I was one of those, “That’s never actually getting done,” doubters. It got done. Finally. Being a doubter doesn’t make me less proud of that giant drill that eventually could.
Bertha is on track to finish tunneling this week. I’m not going to lie, Bertha completing her project is going to feel like the end of an era to me. I might have to do an honorary reading the The Little Engine that Could in her honor when she makes it through.
Everybody knows Seattle is growing. We’ve got a number for how much. Adding around 1000 people per week is a little daunting to think about, especially when I start wondering where to put them. No wonder inventory is so low.
The news this week is a little more focused on community than markets. WSDOT released a very neat video of the SR 99 tunnel in progress and Bertha, the ginormous (that’s a technical term) drill digging the tunnel.
Pike/Pine is getting a little bit tastier, but not how you’d expect. A culinary student is setting up a center to bring chefs and gardeners together for everyone’s improved yumminess. There may have been a more serious point about understanding ingredient origins and incubating variety, but I got distracted.
The Seattle Renters Commission made it a step closer to becoming a real thing and is up for final approval on Monday. This is looking like a very good thing to me; a lot of investors want rental properties that will be attractive, and the commission is poised to improve community amenities to increase that attractiveness in a large swath of areas.