There aren’t enough flame emojis on the Internet to describe the Seattle housing market. In 2021, the median home in King County sold for $828,111, a 14% jump year-over-year. Yowza. 🔥
Despite some seasonal adjustments this winter, prices show few signs of cooling off. But for those hoping to dip their toes in the home buying waters soon, it helps to know what trends to expect. Put on your floaties, and let’s hear what the local experts predict.
Look out for the ‘burbs 🏡
Matthew Gardner, chief economist for Windermere real estate, said the big story for 2022 will be the “rise of the suburbs.” That means areas in Snohomish, Pierce + Kitsap could see heavy house buying activity, thanks to more people working from home and willing to move further from the urban core.
While median home prices for single-family homes in Seattle are well above $800,000, Gardner said places like Burien + Kent are more in the low $600,000 range — and, likewise, bidding wars will heat up all over.
Don’t give up on Seattle 🏡
Buyers hoping to find areas with less competition may want to think about getting a sweet pad downtown. Dean Jones, CEO of Realogics Sotheby’s International, said there may be some deals in the city’s condo market due to so many offices emptying out during the pandemic. But he noted “the tide is rising” there, too, since it takes many years to increase supply with new construction.
Worth it to wait? 🏡
Both Gardner + Jones expect that interest rates will eventually go up, but neither see a major dip in the market anytime soon. In fact, Jones predicts that more young renters will soon turn into buyers, which could drive prices up since there will be higher demand when inventory is still low. Basically, get on that dream home now.
What about renting? 🏡
Jones said Seattle rents have leveled off a bit — but whether they are “affordable” remains an open question. Though a recent study by RentHop listed Seattle as the eighth-most affordable metro market for single renters in the US, a deeper analysis revealed that the numbers are deceptive. The city still has more renters than owners, says Jones, so demand is high + areas near transit hubs — like the Light Rail stations — are seeing huge growth.
But in the Seattle area, median home prices accelerated much more than rents recently because the volume of would-be buyers spiked and the total supply is limited. “There have been far more rentals built than condos, for instance, in downtown Seattle,” says Jones. “In the last decade, there were 27,000 multi-family homes built in the urban core area, but 93% were built for rent and not for sale.”
Eyeing places north 🏡
Gardner and Jones both mentioned the Mountlake Terrace + Totem Lake neighborhoods as potential hot spots. They noted that many outlying areas (like these two) have started to develop their own “main streets,” so folks don’t really need to trek into the city to find great restaurants and cultural activities. Those attractions may “set some new benchmarks [for home prices],” said Jones.
The supply + demand problem 🏡
Jones said the entire housing market saw a 50% listing reduction year-over-year in 2021. There are now one-and-a-half times as many buyers as sellers and not enough new construction around Seattle to balance things out. “Multi-family housing will have to make a comeback,” he said.
The state government is looking at a plan to end single-family zoning near transit hubs, which may create opportunities for more affordable housing. But Gardner noted that such a move may not be a “panacea” since there’s already been so much built on existing land. That’s why he said he hopes to see undeveloped land owned by Seattle and King county be used for housing opportunities down the line.
Pro tip: Another trend to watch for 2022: empty nesters putting up their homes for presale. Basically, older home owners may want to cash in when the value of their property is at an all-time high and use the money to travel or purchase a second home, even if they aren’t ready to move out right away. Buyers may face less competition for such listings — but if many flood the market, that could impact current + future inventory.