If you know Seattle, you know it’s a fairly literary city, but now it’s internationally recognized as such. UNESCO has designated Seattle as a City of Literature, after a years-long campaign by locals for the recognition. This confirms me in my strategy of establishing knowledge of a neighborhood by knowing where, from any given house, I’d go for grocery shopping, tea drinking, and book buying.
The Case-Shiller numbers for August are out, and price increases are still going strong. “Strong” in this case means 11.3% compared to August of 2016. If you’re distressed by that, this article from the Seattle Times might help put things in perspective. It compares the Seattle market for housing (buying and renting) to San Francisco’s market, and the comparison generally comes off favorably for Seattle. That said, having perspective doesn’t mean you won’t still be distressed; “San Francisco is worse” doesn’t mean things aren’t rough here.
This one caught me by surprise: Florida is one of the top places people arriving in Seattle hail from. Our weather is objectively better than theirs, so I can understand the impulse. Welcome, Floridians!
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.
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.
I was slightly off in the timing, but I was right about the weather punishing me for declaring Autumn’s arrival last week. And it’s expected to get warmer tomorrow? Seattle, you and I need to have a serious conversation about appropriate temperature choices for late September.
I suppose it makes sense, though, given the Case-Shiller numbers. As always, the Seattle Bubble has a great analysis, and looks at the local market trends in comparison with national trends for an illuminating picture. Growing that much faster than the national rate is interesting, but I’m not convinced it’s the kind of interesting that’s good. All real estate is local, but national trends have a tendency to correct local anomalies.
At least we’re doing our part to put that market heat to work combating the weather heat. Seattle is ranking pretty well nationally for LEED-certified residential building. Those are buildings that are certified for their “greenness” focusing mostly on energy efficiency. I’ve been a big fan of the current building trends prompted by LEED-certification because in addition to being more environmentally friendly, the construction is frequently higher quality, with better noise control, than the typical construction trends of the ’90’s and aughts.
Anybody paying attention to rental properties in the area may have been following the federal suit against the owner of three buildings in Edmonds who advertised her buildings as restricted to adults, and turned away families with children. That suit has been settled, for $95,000, which is a sizable chunk of change.
Cities in Washington overall made a good showing in a recent list of best cities to live in, but Seattle, and Bellevue particularly so, both making the top 10. Shockingly, they didn’t perform very well on the affordability metrics.
Speaking of affordability, this article has a good breakdown of the long term trends in housing costs in the area, and what factors are likely to drive it going forward. The comparisons to California are particularly apt – I see a lot of interest from people currently residing in California and comparing their current living arrangements to Seattle with an eye toward reduced expenses.
We have numbers for July. Inventory is up compared to June, down compared to July of last year. Not the good news I was hoping for, but better than it could be.
It’s trendy to complain about the traffic in Seattle, but I-5 had a particularly spectacular traffic event: an escaped pig went wandering up the highway. The big was rescued! And sent back to auction.
Everybody loves talking about millennials and the market. It looks like they’re putting down their avocado toast, skipping marriage, and buying homes to give their dogs more space. This actually seems practical to me. (Not the toast part. I’m not putting that down.) Then again, I’m a millennial.
Inventory went up again in July! Two months in a row! Let’s make it it an ongoing trend!! Dancing for everybody!
If you want a peek into one of the factors contributing to the general lack of inventory, here’s one; we’re adding jobs faster than we’re adding housing. The bright side of the article, I suppose, is that we’re the tenth city on the top ten list, so there are nine places who have it worse. You’ll note that San Jose was in the news recently as the place taking the top spot for fastest growing market. These things travel together.
Anybody following the upzoing around the city will be interested in the latest – after a bit of a delay, the upzones for the International District have passed, along with some companion legislation meant to curtail and mitigate the potential displacement caused by the upzoning.
The market is the only thing hot this week; we’re under an excessive heat advisory and it is quite warm by local standards. The city has a list of places you can go to stay cool and protect yourself from the heat. Many of them are places you might be inclined to hang out anyway, which is handy. Stay safe!
In light of the news about increased inventory in June, this article from Redfin about national market trends is interesting. That change wasn’t seen nationally. Given that the rate of growth and inventory depletion we’ve seen has diverged from the national trends (by being faster) that isn’t necessarily surprising. Seattle gets a special call-out for market competitiveness. We’re tied with Denver and Portland for shortest median time on the market at 7 days.
Dovetailing with news about market competitiveness is this report on the growth of poverty in high-density neighborhoods. The article goes into detail about the differences between trends in Seattle as compared to national trends. The insights are likely to be useful to anybody following the upzoning and MHA (Mandatory Housing Affordability) programs in progress across the city.
Mostly unrelated to anything else, there’s a report out tracking how much time people spend in Seattle looking for parking. It’s not pretty. But we already knew that.
Here’s a headline I’ve been hoping to see forever: preliminary numbers for June indicate that inventory is up! Anecdotally, that seems to fit what I’ve been seeing – it has been marginally easier for me to find active comps on properties than what I’ve been accustomed to, so I expect that uptick will survive any corrections as the numbers firm up. In the mean time, I’m going to chalk this up as a 4th of July miracle and pretend the fireworks yesterday were all about this.
Indications of an increase in inventory isn’t the only big news out in the last week, though. It looks like Redfin is preparing to go public, which has industry wonks in an excited tizzy. The Seattle market is, of course, deep in Redfin’s home turf, so the opportunity to peek under their hood provided by preparations for an IPO is great fun. I’m most interested in seeing what they’re going to fund with that sudden injection of capital. Whatever Redfin is doing, it’s usually worth paying attention to. They both have a deep knowledge of how the industry actually works, and how to competently do tech in the industry, which is an exceedingly rare combination. This will be water cooler fodder for a while to come.
Any other week, the imminent arrival of not one, but several bike share options would have taken the top news slot. This is not that week, but it’s still exciting news. I’m looking forward to the battle of the bikeshares, though I’m likely to sit out active participation in favor of quality time with my trusty cycle.