What’s the Deal with Real Estate in Seattle?
Sitting just 100 miles south of the Canadian border, Seattle is the northernmost major city in the United States, and the seat of King County. With a population of over 737,000, it’s the largest city in the state of Washington and in the entire Pacific Northwest region. Additionally, it is one of the fastest-growing major cities in the United States, with a growth rate of 21.1% between 2010 and 2020. Seattle is well known for its diverse population, culturally progressive community, and musical history; the prominent jazz scene in the early 20th century gave rise to many famous jazz musicians such as Quincy Jones and Ray Charles. Additionally, Seattle is the birthplace of Jimi Hendrix, and the origin city for many influential rock bands including Nirvana, Pearl Jam, Foo Fighters, Alice in Chains, and Soundgarden.
Seattle’s economy is driven by the Port of Seattle, as well as a number of industrial, service, and technology companies. Five Fortune 500 companies have headquarters located in the city: Amazon, Starbucks, Nordstrom, Weyerhaeuser, and Expeditors International of Washington. There are a variety of other notable companies located in nearby cities that are also associated with the Seattle region, including Microsoft, Costco, and Nintendo of America. Noted for startup businesses in clean tech and green construction, Seattle committed to becoming the first “climate neutral” city in North America, with goals of achieving net zero greenhouse gas emissions per capita by 2030.
Real estate in Seattle is a hot market, and has been for quite a few years. Leading the Northwestern United States in population and opportunity, property in Seattle is highly sought-after, and the effects of the pandemic have only exaggerated this. The city is showing record-low inventory levels, and simultaneously, record-high sales. The median home price in King County was $759,735 as of February 2022, which is almost a 12% increase from the previous year. So far in 2022, we’re seeing dramatic increases in the number of homes on the market each month, with a 33% inventory increase from January to February. This increasing number of sellers entering the market could slow appreciation rates in the coming months.
However, growth in demand is also expected to continue. Interest rates remain low to stimulate the post-pandemic economy, and a lack of new construction in underdeveloped suburban areas will contribute to an eventual strain on the already low housing supply. The entire Puget Sound region has had less than a month’s worth of inventory on the market for quite a while — a 6-month inventory is indicative of a balanced market.
As for Seattle specifics, the median listing price in 2022 is $790,000, slightly higher than the King County average. The most affordable neighborhood in the city is Broadway, with a median list price of just over $550,000. In contrast, the most expensive neighborhood is West Queen Anne, with a median list price of over $1.3 million. The market inventory in the city of Seattle remains low, at just over half of one month.
Even though prices in this major city are high compared to surrounding areas, investments in Seattle remain favorable as the demand for property continues to increase. As with any big city, growth in the urban center, in combination with growing individual liberties due to a push for work-from-home lifestyles, indicates growth in neighboring cities and suburbs. Investors are advised to consider properties within King County, as well as in nearby suburban regions, such as Pierce and Snohomish counties.
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