The housing market in Seattle is struggling with paralyzing affordable problems
“It’s hard to find a market that is as expensive as Seattle,” said Jeff Tucker, an economist for the established Seattle Windermere real estate. “We are really just behind the expensive Coastal California markets when it comes to typical house prices for single-family homes.
“With higher interest rates that we started, yes, the affordability restrictions seemed to give a bit of a ceiling to price rating.”
Tucker’s comments are reflected in the data. According to Altos, The median house price is no less than $ 910,000 compared to $ 649,999 at the start of the COVID-19 Pandemie in March 2020. Seattle has one of the higher median incomes in the country for $ 110,744, but that does not translate into price lighting.
The price income ratio of the Emerald City is 7.4, with only Los Angeles (12.49), San Diego (10.41), San Francisco (10.1) and Miami (8.5). It is also higher than many markets known for astronomical house prices, such as New York (7.3), Boston (7.18) and Washington, DC (6).
Seattle does not have much open country for builders to tackle the housing shortage. But the State took action in 2023 by taking legislation that makes accessory housing units (ADUs), duplexes and four plexes in almost every city in Washington possible. The law will take effect next month.
However, this has only a limited impact, because an owner of a property must be created for more density, both the interest in doing this and the funds for making it happen. Many will not do it if there is no clear and direct increase in the value of the house.
“I talk to more customers who are looking for multigenerational situations, whether it is to build an Adu on their own destiny, or to sell and buy a multigenenerational house that they could have the younger or older generation,” ” Redfin Agent David Palmer said. “I see a mix of both.”
Insofar as Upzone helps with affordability, it can be canceled by the state budget approved in May by GOV. Bob Ferguson. It adds $ 9 billion to extra taxes. On top of tax increases with regard to property of real estate, there are others that will indirectly influence buyers and sellers – including higher sales tax, real estate and power gain tax.
“It’s a historical tax increase,” says Nick Glant, founder of Seattle’s Real homes. “There are some people who feel that they get increased costs to live here. It gives some of our makers of work and perhaps the higher segment a reason to spend the next 10 years in a place that may be a bit more tax -friendly.
“I would not necessarily call it an exodus, but I would say that there is a bit of a movement to look at other states where it might be a bit more affordable to live in the long term, especially in retirement years.”
On top of local issues, home buyers and sellers struggle with the macro -economic headwind who slows markets everywhere.
April’s rate announcement of President Donald Trump refined the global markets and pushed the mortgage interest back to 7%. The Federal Reserve has not indicated an indication that an interest rate reduction will come in the short term.
The tariff news also gave consumers a reason to go carefully. A recent Redfin survey showed that more than half of the respondents cancels or pauses their search for large purchases such as a house.
Consumer sentiment refueled in the aftermath, although it has been reflected since the rates have been paused. Yet there were material consequences for the housing market.
Palmer said that he had a customer in a purchase in April because their stock portfolio dropped quickly and they partially paid for the transaction by selling shares. Markets have also returned since then, but many people are alert for every subsequent economic drama.
“I am still optimistic about Seattle in general,” said Palmer. “I have experienced the real recessions, and I just don’t see much of those indicators. Now, granted, the last time I said such things, Mother Nature said” Hold my beer “and we had a pandemic, but it is not damn and gloomy here.”
