I am thrilled to bring you this month’s event calendar! Your comprehensive guide, take a peek at what’s going on! From Kids Night at Museo Art Academy in Issaquah and brilliantly lit botanical gardens in Bellevue, to the Kirkland Wine Walk, here’s what’s happening around the sound.
Washington’s Largest Affiliate Makes “Hall of Fame” for Fifth Year; Cites “Change Agent” Status for Growth
Realogics Sotheby’s International Realty was recognized by The Puget Sound Business Journal among the top 100 “Fastest Growing Private Companies” in Washington State, according to their 2016 Book of Lists. RSIR is ranked 46th on revenues of $20.66 million in 2015 posting an increase of 125.62-percent compared with 2013. The firm was previously ranked 71st in 2015, 91st in 2014, 24th in 2013, and 2nd in 2012. The list was compiled by companies headquartered in Washington State that posted corporate revenues of ate least $500,000 in 2013 compared with 2015. The sold out event was held at Century Link Field on October 21st complete with photo opportunities on the play field, an inspirational speech by former Seahawks Quarterback Jim Zorn and a performance by the Seahawks “Blue Thunder” drum team.
“We are challenging the status-quo in our industry and this is best demonstrated by the company we keep, the properties we represent and the results we create,” said Stacy Jones, Owner and Vice President of RSIR. “Since we first launched with Sotheby’s International Realty in 2010, it’s been a meteoric rise for our company and for our brokers. There’s plenty more growth ahead with new branch offices and our ever expanding roster of leading sales associates.”
Jones points to a similar growth rate for the global network that now boasts nearly 19,000 real estate professionals and 800+ branch offices in 63 countries and territories. In addition to its global footprint, Sotheby’s International Realty Affiliates’ new SIR.com website now garners more than 1.25 million unique visitors per month and half of this traffic is now being derived outside the US. Worldwide, the SIR network exclusively represents approximately 50,000 of the world’s most significant properties for sale.
Sothebysrealty.com Adds 3D Tours with Virtual Reality Capability for Property Detail Pages
Sotheby’s International Realty Affiliates LLC today announced that its global website, sothebysrealty.com, now supports 3D Tours on its property detail pages allowing real estate consumers the opportunity to fully immerse themselves in homes listed by the Sotheby’s International Realty® brand. The 3D Tours will also feature a Virtual Reality Tour (VR) experience that can be viewed through a compatible device such as an Android phone or VR headset.
The 3D and VR Tours are produced by strategically placing specialized cameras throughout a home to create a result that transforms the traditional way people view homes online. The 3D and VR Tours add an additional layer of content to the existing property detail pages on sothebysrealty.com which also provide a written description, high-resolution photographs and high-definition videos. At launch, the Sotheby’s International Realty brand will have 3D Tours available on over 1,000 properties that are viewable on desktop, tablet or smartphone.
“Introducing 3D and VR Tours on sothebysrealty.com is just another example of how we are keeping theSotheby’s International Realty brand on the cutting edge while creating an immersive experience for consumers,” said John Passerini, global vice president, interactive marketing at Sotheby’s International Realty Affiliates LLC. “Distance can present a challenge when looking to buy a home and virtual reality has provided a provocative solution. This technology is allowing buyers to purchase homes without having to physically travel to view them, which is especially relevant to the global clientele we serve.”
The sothebysrealty.com site experienced 16 million user sessions in Q1-Q3 of 2016, a 60% increase year-over-year. Property detail pages on the brand site support Matterport, a past winner of the 2014 Realogy FWD innovation summit, and additional compatible 3D Tours.
In coordination with this announcement, Sotheby’s International Realty is also a real estate launch partner forMatterport’s CoreVR release— the largest collection of virtual reality content across multiple disciplines. With the adoption of CoreVR, Sotheby’s International Realty will be able to offer both a 3D and VR experience. Additionally, Sotheby’s International Realty property listings on Mansion Global, the digital luxury real estate destination from Dow Jones, will also be equipped with the 3D Tour feature.
Click here for an example of a 3D Tour as shown on a current luxury property listing on theSotheby’s International Realty website.
The Sotheby’s International Realty network currently has more than 19,000 affiliated independent sales associates located in approximately 850 offices in 65 countries and territories worldwide. In addition to the referral opportunities and widened exposure generated from this source, the firm’s brokers and clients will benefit from an association with the Sotheby’s auction house and worldwide Sotheby’s International Realtymarketing programs. Each office is independently owned and operated.
I am thrilled to bring you this week’s event calendar! Your comprehensive guide, take a peek at what’s going on! From “Foodie Friday” at Columbia Winery in Woodinville and the Leavenworth Oktoberfest, to Nightmare at Beaver lake, here’s what’s happening around the sound.
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A tree lined drive welcomes you to this sprawling yet private 6,990 square foot, 5.2 acre estate. This floor plan was meant for entertaining as one room flows seamlessly into the next. The beautiful finishes and grand scale of the house are complemented by the outdoor area where your own private resort awaits you. With a heated salt water pool, lighted tennis court and terrace with fireplace, activities abound in your own paradise.
18025 NE 136th Street | Redmond, Washington
Offered at $2,988,000
I am thrilled to share that the firm made the annual Puget Sound Business Journal list of Fastest-Growing Private Companies for the fifth year in a row! In a recent article entitled “100 Fastest-Growing Private Companies pack economic wallop,” Becky Monk reveals that “the 100 companies that made the Business Journal’s 2016 list collectively had revenue of nearly $3.17 billion in 2015, an increase of 137.26 percent over their total revenue in 2013.”
“We are so proud of the hard work of our brokers, staff and executive team,” said Dean Jones, President & CEO of RSIR. “It is an honor to make the list for the fifth year in a row and we look forward to celebrating at the upcoming ‘Blue Friday Bash’ at CenturyLink Field.”
The Puget Sound Business Journal will reveal where each company ranks on their list during the celebration, which will include a welcome by the Blue Thunder drum corps followed by a tour of the field, photos in the end zone, and end with a beer and wine reception.
Monk adds that “making Washington’s Fastest-Growing Private Companies list isn’t easy. To make the list, companies must be headquartered in Washington state and be privately held between 2013 and 2015. They must have revenue of at least $500,000 in 2012 and report a revenue increase in 2015. The CEOs and CFOs or accountants have to personally vouch for the revenue reported to the Business Journal. Only those with the largest increases made the list.”
High Profile Event Attracts Lifestyle Sponsors as New Report Compares San Juan Islands to New York’s Long Island; Targets Brokers and Prospective Buyers
Realogics Sotheby’s International Realty announced today a progressive tour of legacy homes in the San Juan Island archipelago from October 4-9, which is scheduled during the Savor the San Juans initiative managed by the San Juan Islands Visitors Bureau. A matchless collection of up to ten properties ranging from below $2,000,0000 to $17,000,000 will be available to preview for registered brokers on October 4th and 5th followed by open house viewings, by invitation, with prospective homebuyers on October 8th and 9th (by appointment). Participating lifestyle sponsors include Windermere Real Estate / Orcas Island, Kenmore Air, Rosario Resort, Seattle Magazine, Sea Magazine, Puget Sound Business Journal,Sundance Yachts, and GeekWire.
“This is a matchless opportunity to experience some of the most extraordinary legacy homes available for purchase in the San Juan Islands and beyond,” said Dean Jones, President and CEO of RSIR. “Attending brokers and their clients will discover why this storybook lifestyle is such a well-kept secret and a relative value compared with our East Coast peer group. They will also discover considerable value being offered with these move-in ready estates.”
Among the properties on tour is Friday Harbor Estate, which is currently owned by Rock and Roll Hall of Fame legend Steve Miller.
Jones recently commissioned a research study, the “Legacy Home Report” to explore property values with the San Juan Islands compared to New York’s Long Island. He concluded that not only are the homes in the Pacific Northwest a fraction of property prices in popular harbinger markets like the Hamptons but, in fact, several are being offered below replacement costs – but perhaps not for much longer.
“As the Seattle/Bellevue metro area continues to prosper as the next global city on the rise, so, too will the concept of legacy home acquisitions in the destination communities that surround this booming economy,” adds Wally Gudgell of Windermere Real Estate and longtime resident of Orcas Island. “Our property tour and the Savor the San Juans promotion will provide a convenient and seamless lifestyle experience for locals and newcomers alike.”
Gudgell says island living spans a broad spectrum of lifestyles from modest farmers and craftsmen to Hollywood A-listers and tech titans, which helps create the diverse and dynamic culture scene supporting demand for all property types and price points. An enviable lifestyle and a lack of a state income tax in Washington have encouraged many to seek residency in the San Juan Islands for the majority of the year while traveling the world or enjoying a second home in warmer climates during the winter months.
The Legacy Home Tour will officially commence on October 4th where attending brokers will arrive to Rosario Resort and enjoy a wine tasting reception at a nearby listing for sale. On October 5th a series of shuttles will tour an Orcas Island estate before returning to the marina where guests will board a collection of yachts to visit or float by waterfront estates on San Juan Island, Shaw Island and Reef Island. The flotilla will return to Orcas Island where chartered flights operated by Kenmore Air will return guests to Seattle while others will stay to enjoy other festivities. Along the way, event sponsors promise to stimulate the senses with the sights, sounds, smells, tastes and touch that is unique to the region. John Spear, Director of Custom Publishing and Associate Publisher at Large for Tiger Oak Publishing, owner of Seattle Magazine will attend the festivities to document the experience for his readers.
During the weekend on October 8th and 9th the properties will be available for private showings by appointment with qualified homebuyers. Guests are encouraged to enjoy commercial flights operated by Kenmore Air and stay at the famous Rosario Resort, which was once a legacy home built by philanthropist Robert Moran that was later converted to a hotel and is featured in the report.
“We welcome guests to experience the natural wonder that we live in every day,” said Lance Evans, Director of Orcas Island Chamber of Commerce. “Most people think of our community as a destination resort but the islands are home to full time residents with year-round services and amenities, renowned schools, and a robust cultural scene.”
The Savor the San Juans campaign spans seven weeks from September 22nd through November 12th, which promotes food, farm and film experiences throughout the three main islands that comprise San Juan County – Lopez, Orcas and San Juan. The program includes an abundance of wine tastings, harvest dinners, farmers’ markets, film festivals and cultural experiences, www.VisitSanJuans.com/Savor.
Properties showcased during the Legacy Home Tour include:
• Cormorant Bay Estate | Orcas Island | $17,000,000 presented by RSIR
• Friday Harbor Estate | San Juan Island | $16,800,000 presented by RSIR
• Madroneagle Estate | Orcas Island | $10,000,000 presented by Windermere & RSIR
• Langdon Road Estate | Orcas Island | $6,200,000 presented by Windermere
• Private Waterfront Residences | Orcas Island | Undisclosed presented by Windermere
• Crane Island Estate | Crane Island | $3,200,000 presented by Windermere
• Reef Island Property | Reef Island | $5,000,000 presented by Windermere
• Spring Hill Lodge | Orcas Island | $1,880,000 presented by RSIR
• Braveheart Estate | Orcas Island | $1,895,000 presented by RSIR
• Lopez Island Estate | Lopez Island | $1,229,000 presented by RSIR
A lifestyle video has been created by Realogics Sotheby’s International Realty to showcase several of the properties and a marketing campaign has been launched to build awareness for the Legacy Home Tour. For more information, visit www.LifeintheSanJuans.com.
The popular West Coast cities of San Francisco, Los Angeles and Vancouver have long been the most direct routes to New World prosperity for Asian immigrants and their families. Now that generations of Chinese buyers have transitioned to life in North America, their experience and trend spotting is bringing to bear more practical considerations of economic fundamentals, financial and educational opportunities, and overall quality of life. So it’s no surprise that relative affordability, propensity for capital appreciation and even a recently imposed 15-percent foreign homebuyer tax in Vancouver, are boosting interest in alternative markets like Seattle—the next international gateway city on the rise.
Matthew Moore, President of the Americas for Juwai.com, a popular residential real estate search portal in China, noted significant changes: “Juwai.com buying enquiries to Seattle increased by 143 percent in August 2016, compared to one year earlier. Meanwhile buying enquiries to Vancouver dropped by 81 percent during the same period, with all of that drop concentrated in the premium end of the market.”
The forested mountains and deep blue waters of Puget Sound, together with high-quality schools, a vibrant and diversified economy, and absence of a state income tax (unlike California) have drawn a gathering surge of Chinese buyers to the Greater Seattle region in recent years. Somewhat overlooked by past generations of immigrants in comparison with Vancouver BC and San Francisco, the Pacific Northwest has so far avoided the trap of high growth fueled by non-resident real estate investment. Yet, industry experts believe that’s coming and likely part of the draw. To the trained eye, Seattle, and especially Bellevue, is looking more and more like Vancouver, albeit about twenty years its junior.
I am thrilled to bring you this week’s event calendar! Your comprehensive guide, take a peek at what’s going on! From Seattle’s annual Bumbershoot events to the Saturday Market on Bainbridge Island and the opening of the Bellevue Arts Museum Biennial, here’s what’s happening around the sound.
Exciting news! I am featured as a resident expert for Sammamish and Issaquah in the latest edition of Seattle Magazine!
Make sure to pick up a copy and look for the insert inside, brought to you by Realogics Sotheby's International Realty! Read the online version here.
A private drive leads toward sweeping 180 degree views at Glacier Peak, perched high above the stunning Snohomish Valley. Walls of windows carry throughout the home to frame iconic Pacific Northwest vistas that complement a one-of-a-kind retreat situated across more than an acre of pristine land. Pride of ownership and meticulous care are evident from the minute the front door opens, as stunning finishes and soaring ceilings meet a striking wrought iron staircase.
Culinary creators will revel in a spacious kitchen with walls of windows and light, stainless steel appliances, and Corian countertops with effortless movement toward the formal dining room and breakfast cove. The tranquil master suite with a private bath and sitting area offers an area of respite for waking up with a morning cup of coffee or melting the day's stress away.
With a gracious 3,363 square-foot floorplan, harmony is between indoors and outdoors is achieved, as the lower level features an office alcove accompanied by a living room and bonus area that flow out toward the backyard. Catch marvelous views of wildlife with lush green landscaping and brick patios for entertaining.
An unfinished room is ready for your vision, whether it's a wine cellar, craft room or extra storage. A three-car garage with mudroom paired with an additional detached two-car garage offers plenty of space for the hobbyist. Feel miles away from it all yet enjoy convenient access to I-5 and Boeing Everett. Protected Views.
A Zillow report released on July 22 shows Seattle rents rising faster than in any other U.S. city, increasing 9.7% from June 2015 to June 2016. Average monthly costs have risen nearly $500 over the last four years and have now exceeded the $2,000 mark for the first time in Seattle’s history. Although there has been nearly constant construction adding thousands of new units, the rental market continues to grow undeterred. In 2011, Seattle’s rent was about $300 more than the U.S. average; now, in 2016, it has more than doubled to $620 above the U.S. average.
In a Seattle Times article, Svenja Gudell, Zillow’s chief economist says there are 3 main factors that continue to drive rental prices up. The first is the near-constant stream of new hires relocating to the region as Seattle companies continue to hire. Coming from out-of-area, these people are more likely to rent first before buying. Second, there is intense competition and low inventory in the home sales market, driving more people to rent when they would otherwise buy. Thirdly, many of the newest apartment developments are luxury or high-end and start at a higher average sales price.
In a market with such volatile rent prices, however, we believe that the intense competition in the home-buying market is actually an argument to make an even greater effort to buy. In fact, we will start to see a shift towards homeownership, particularly as new, for-sale condominiums are being developed in Seattle after a long run of developments intended for rent. NEXUS hopes to capitalize on the expectation that rental prices will continue to spiral out-of-control, forcing renters to take a good, hard look at buying. Doing so will dampen the risk of being priced out of the rental market by locking themselves into a fixed monthly cost through the long-term mortgage that homeownership provides.
In addition to greater financial stability and established budgetary expectations, home ownership provides tax benefits as well as a tangible asset that has historically appreciated in value over time. While average rental prices continue to increase in Seattle, average home prices are increasing substantially as well, as those are up 11.8% year over year, fourth in the nation. While the rate of increases will likely not remain this high forever, we only see signs that overall growth will continue as companies keep hiring and attracting people to this region. Rather than paying a substantial amount of money in rent every month, garnering no equity or capital, many people will start to realize that home ownership is the more attractive option in this market. Driven by projects like NEXUS that satisfy the needs of consumers who prefer to live in an urban environment but are discouraged by an exorbitant rental landscape, home ownership should be everyone’s goal in the coming years.
Enter to soaring ceilings, Brazilian cherry floors, granite counter tops with designer tile back splash and SS appliances. Gas cook top range with granite island and pantry in kitchen. Over sized nook which leads to private patio. Great room with gas fireplace for those cozy evenings. Air conditioning for those hot spring and summer days. All white trim and wainscoting throughout. Minutes to 1-5, 405 & shopping. Great shopping nearby and Northshore School District!
18333 39th Drive SE, Bothell
Eager homebuyers rallied during the first half of 2016 increasing unit absorption and median home prices by 48% and 28%, respectively according to analysis of Northwest Multiple Listing Service data released as of June 30th. The typical condominium is selling in just over a month with a median home value of $575,000. However, a closer look reveals that 135 of the 381 condominium closings so far this year were in the INSIGNIA condominium tower, a new construction development (and one remaining developer-owned unit in the Four Seasons Private Residences) whereas there were effectively no new construction deliveries or closings during the same term in 2015. When removing this spike of higher-priced, new inventory in the overall resale market still expanded by 22% year-over-year but total resale closings actually decreased 5% with 246 homes in 2016 (including a few resales at INSIGNIA) against closings of 258 units in the first half of 2015.
“These market results were anticipated given the rising demand and relatively anemic supply being added to the skyline,” said Dean Jones, President and CEO of Realogics Sotheby’s International Realty. “I wish I could point to a cure for homebuyers hoping for greater affordability but the answer is supply and that can take years to develop.”
Below are a collection of graphs illustrating the changing market that compare the first half of 2015 with the first half of 2016, both with new construction and resale (All) as well as exclusively resale homes (Resale).
To be sure, much of what’s occurring in the development of downtown Seattle has been a common discussion about supply and demand. In 2013, Jones prognosticated on this very topic in an interview with Seattle Magazine’s Publisher’s Series in which he mentioned the northern migration of downtown Seattle and a condominium comeback, although nearly three years ago the housing market was still very much in recovery mode.
Then, earlier this year 425 Business Magazine tapped Jones about the trends for urbanization, this time with a focus on the Eastside. He notes that the rising trend for foreign direct investment in the region and a propensity for in-fill development will have even the much smaller Eastside urban landscape soon looking more like a skyscraper city before long.
Most recently the state of the in-city housing market has less to do with projections but evidenced by consumer response. Among the newly constructed in-fill condominiums in the region (either in development or planned), which includes INSIGNIA, LUMA, Gridiron and now NEXUS, 80% of the homes have already been reserved, pending or closed.
“That’s just one of the reasons we’ve been so successful with NEXUS,” said Michael Cannon, Director of Sales for NEXUS. “We’re well positioned both in our geographic location as well as our time in the development cycle. Buyers have clearly been waiting for the next generation of high-rise living and at NEXUS, ‘X’ marks the spot.”
Cannon says homebuyers have a remarkably clear view of the future as downtown Seattle is moving north and NEXUS is in the heart of a new multi-billion dollar vertical village.
*Information gained from sources deemed reliable but cannot be guaranteed.
According to the most recent report by the Downtown Seattle Association, development throughout the Emerald City is setting new records with 65 active projects either under construction or expected to start shortly.
This is significantly more than any time prior, with every real estate segment represented, including high-rise offices, residential, hotels, medical centers and major technology campuses represented by Amazon,Facebook and Google to name a few. Residential development is among the most active product segments with 10,000 housing units delivered in the past five years and another 10,000 currently under construction or in site preparation including recent land use permits issued. Nearly 19,000 additional housing units are in pre-development stages in the high-density neighborhoods that comprise downtown Seattle.
That may sound like a lot of housing, but experts say construction is still lagging behind demand and as a result, both median home prices and rents continue to rise. The fact is that people keep moving into downtown Seattle. Conway Pedersen recently adjusted their 2016 Puget Sound job forecast up by 12,400 (35%) to total 47,900. From a macro perspective, residents of Washington enjoyed personal income growth increases of 1.5% for the first quarter of 2016 topping the rest of the nation in wealth generation. Among the 961 new construction condominiums currently in development, 786 (or 82%) have already been presold. Meanwhile, another 374 units that are soon to break ground at NEXUS have already posted 80% presale reservations. Interestingly, each of these new condominium projects are in distinct urban neighborhoods as downtown Seattle is expanding its residential footprint.
Those who move to the Seattle area are faced with a market in which the cost of renting and buying are comparable and, as of late, both increasing. The Puget Sound Business Journal reported yesterday that “if you thought the Puget Sound region’s flurry of apartment construction would drive rents down, you were wrong,” given that rents have increased over 10% in the past year alone. Average rents have risen in the downtown area by 41.7% since 2010, according to O’Conner Consulting Group, yet the median home price of condominiums have grown as much (42%) in the last year alone as of May 2016 (NWMLS), spiked in part by the new construction inventory. Homebuyers across the state are seeing increases in prices, as The Seattle Times reported this week that “Washington’s escalating prices have sent it zooming past several other states toward the top of the list of priciest places in the nation to own a home.” The Times says statewide home prices rose nearly 11% in the month of April when compared to last year’s numbers, representing “the biggest jump of any state in the nation for the third month in a row.” The lack of inventory paired with a strong economy has caused home prices to increase in nearly all (37 of 39) counties in Washington state year-over-year.
It’s ironic that what was once Denny Hill, a mass of earth that used to run between 1st Avenue to Denny Way between Pike Street and 5th Avenue, is effectively filling in again with high-rise developments including the urban campus for Amazon. In the late 1800’s, city planner R.H. Thomson convinced property owners a tenfold increase in value if they allowed the City of Seattle to blast away the hills using water cannons that used more than twenty million gallons of water per day. After several phases and several decades, the hill was gone leaving flat, developable land. Now more than a century later, residents are again enjoying the view from this hilltop, albeit in the form of a high-rise condominium, apartment or office building.
The epicenter of this construction boom is the “Amazone” – nicknamed for the major urban campus being developed by Amazon.com. The tech and retail giant now leases and owns over 8 million SF of office space and will have over 10 million SF when planned projects are complete. This represents 14% of Seattle’s current Class A office space and will be 18% when they are finished. Amazon took up 2.6 million SF in 2015, 60% of all Class A absorption. Revenue in 2015 was $107 billion. In 2015 it grew its worldwide headcount by 50%, going from 154,000 to 231,000.
The Denny Regrade area and a northern migration of downtown Seattle is similar to the development trends of South of Market (SOMA) and Mission Bay in San Francisco. This 303-acre neighborhood on the outskirts of downtown San Francisco became the epicenter of a real estate bonanza that has rocked the Bay Area more than its 1906 earthquake. What’s different however, is Seattle is generally much more affordable, higher density and lacks the state income tax of California so it’s no wonder so many major companies, including tech firms like Google and Facebook, are opening major urban campuses in the Silicon Forest instead of the Silicon Valley.
On June 13th, Lisa Selin Davis of Bloomberg told readers to “Fly Like an Eagle Into Steve Miller’s $16.8 Million Washington Estate,” listed by Realogics Sotheby’s International Realty (RSIR). As Davis writes, “the musician Steve Miller famously wants to stay right there at home, playing his music in the sun. And that’s what he’s been doing since 2011, when he built an 11,686-square-foot home on 38.72 acres he had owned in Friday Harbor, on San Juan Island, Wash., for decades. Alas, now he’s got to be movin’ on, and his house at 67 Roulac Lane in Friday Harbor” is now on the market with RSIR.
Dean Jones, Owner & CEO of RSIR, spoke with Davis about the property, and “described the sprawling rambler as having a Polynesian feel: ‘Hawaiian Lanai meets Northwest contemporary.’ It’s outfitted with oversized barn doors that easily slide open to those surroundings, letting in sea breezes.” He also discussed the accessibility via seaplane, San Juan Island’s position as a “haven” and the wealth moving from California to Washington State for the tax benefits.
The Seattle Times tells readers that “Rocker Steve Miller’s home in San Juans is yours – for $16.8M,” as Melissa Davis says “Rock ‘n’ Roll Hall of Fame inductee Steve Miller has decided to fly – like an eagle, yes, we know – from his San Juan Island estate.”
Seattle PI says “Steve Miller’s Friday Harbor estate for sale,” as Kirsten O’Brien writes that “if you’re that special kind of classic rock fan and island aficionado who also happens to be a tech millionaire, your dream property just came on the market.” O’Brien highlights the 360-foot deepwater dock, as the article reads, “‘It is one of the most Gucci docks in the area,’ Jones said, describing the dock’s extravagant nature. He said Miller kept his yacht Abracadabra there, and it also has space for jet skis, seaplanes and other water toys commonly owned by the rich and famous.”
Lisa Johnson Mandell of Realtor.com announces “Rock Hall of Famer Steve Miller Selling Secluded Mansion on San Juan Islands.” As Mandell is quick to point out, the $16,800,000 price tag “might sound like a princely sum, but Miller isn’t playing the joker. San Juan, the namesake island of the remote archipelago, is a 40-minute seaplane ride from Seattle, which makes it an ideal respite for actors, musicians, politicians, and tech titans.”
Seattle Refined featured a photo gallery of “Steve Miller’s $16.8M Friday Harbor House,” describing that “the lead musician of the Steve Miller Band has just put his 38.72 acre home in Friday Harbor on the market for $16.8 million.”
I am proud to share that Realogics Sotheby’s International Realty ranked among the top ten largest real estate brands in Washington State according to a recent report by Trendgraphix as of May 2016 based upon the trailing 12 months of total sales volume. The data suggests that amongst its peer group of established brokerage firms, RSIR is the fastest-growing, increasing its unit volume and gross sales volume by 25-percent and 53-percent, respectively year-to-date (May 2016) compared with 2015. Also noteworthy, RSIR consistently maintains the highest average listing and buyer side sales values and the greatest production on a per broker basis compared with its peers. As an independently owned and operated franchise, RSIR does not aggregate or report the sales activity of other affiliates in Washington.
“These statistics further validate the power of our brand, our marketing prowess and the hard work of our dedicated real estate professionals. Our agents have earned the trust of our valued clients by acting as industry change agents proudly serving all property types and price points,” said Jennifer Johnsen, Vice President of Brand Development. “When combined, all these factors are having the intended effect in our industry.”
Reservations could represent more than $200 million in presales; median home prices rise in downtown Seattle.
The Burrard Group has accepted 244 first-position, unit-specific reservations for priority presales at NEXUS, a new 374-unit high-rise condominium tower located at 1200 Howell Street in downtown Seattle. Project representatives at Realogics Sotheby’s International Realty report that more than 500 prospective homebuyers were processed through the NEXUS Preview Center at 2715 1st Avenue on June 4 and 5th. Several groups camped out overnight to ensure a first place in line while a crowd of approximately 130 were queued up by 11am on June 4th when the reservation event commenced. Prospective homebuyers were offered an individual home for priority presale with a price range for a $5,000 fully-refundable deposit to be held in escrow. Reservations will convert to a Purchase and Sale Agreement during the Fall of 2016, commensurate with the opening of a formal sales center and the ground-breaking of the development. NEXUS is scheduled for occupancy by mid-2019.
“Our opening weekend results suggest a growing preference for condominium ownership after an unprecedented apartment cycle that added nearly 10,000 new rental units to our skyline,” says Dean Jones, President and CEO of RSIR, the firm representing NEXUS. “Those apartment towers have been incubating future homebuyers who are increasingly recognizing the investment potential and benefits offered by homeownership. NEXUS provides an opportunity to own a slice of this fast-growing metropolis.”
Jones refers to this northeast corner of downtown Seattle as the “East Village” where he’s tracking more than 25 new development projects representing investment in excess of $6 billion – comprising 10,000 new housing units (mostly apartments), 2 million square feet of office space, 185,000 square feet of retail, 1,900 new hotel units and the $1.4 billion expansion of the Washington State Convention Center. A virtual tour of the future skyline called Cityscape 2020 can be experienced online at www.NEXUSseattle.com.
“NEXUS is turning heads and changing mindsets at the same time,” says Michael Cannon, Community Sales Director for NEXUS and a broker with RSIR. “Our reservation holders are current renters, move up buyers from other condominiums, as well as downsizing empty nesters and families setting up a second home, student housing, investments and retirement plans. It’s a diverse mix.”
Cannon says all buyers are drawn to the development’s front and center location within a walkable neighborhood on the rise with immediate access to I-5 and the expanding light rail system by Sound Transit. He says consumers recognize how traffic-congested Seattle is becoming and they desire the flexibility of commuting options.
According to Cannon, the 244 unit reservations included all 60 units that did not include parking stalls as well as 32 units that will share unassigned “Flex Parking“ (shared parking coordinated by a custom app). Every other home reservation included at least one parking stall with a second stall available for larger homes. Reserved homes were distributed across product type, from efficiently planned studios and open one bedrooms priced from the low $300,000s, up to expansive two-story Skylofts and penthouse unit combinations valued at more than $3 million.
“Our tremendous market response to date suggests that NEXUS is exposing some pent up demand for high-design, attainably priced homes,” said Christian Chan, Executive Vice President of Burrard Group, the developer of NEXUS. “Seattle is truly becoming more and more like the Manhattan of the West Coast, where consumers can live, work and play within an urban context and many will prefer a lifestyle without the burden or expense of a car.”
According to the latest S&P/Case-Shiller, home values rose 10.8% year-over-year and 2.4% from February to March 2016, setting a new benchmark in home values and surpassing the previous peak in the summer of 2007. The significant growth has caught some by surprise but for those close to the industry, Seattle is simply catching up to other West Coast gateway cities such as San Francisco or Vancouver, BC. In fact, a recent Seattle Times article highlights that Seattle had the second highest metro area home price increase year-over-year, rising 10.8% in March (only Portland exceeded Seattle, which rose 12.3%). Seattle, however, was actually the fastest rising market month-over-month in March, increasing 2.4%.
So is this a bubble? Probably not, suggests Jon Talton of The Seattle Times. He takes into consideration that the Great Recession and the housing market decline that began in 2008 were caused by a glut of subprime mortgages and too many unqualified homebuyers speculating in the market. This along with eager mezzanine financing led to a misread of demand by many developers that oversupplied the market with inventory. Nowadays the opposite effect is playing out where there is anemic inventory, especially in downtown Seattle, according to Dean Jones, President & CEO of Realogics Sotheby’s International Realty. He suggests the market may have “overcorrected.”
Jones made some predictions about the state of the in-city housing market a year ago when he participated in the article “Manhattanziation of Seattle” by Cynthia Flash of the Puget Sound Business Journal.
For the most part the upward pressure on pricing has occurred and the ongoing comparisons to Seattle becoming more and more like San Francisco was best summed up in a recent interview with Gregg Lynn, a top-producing condominium broker in California based in San Francisco at Sotheby’s International Realty. So, will Seattle end up like San Francisco over the next few years? Check out why Lynn says he “can’t see it not happening” and more, in the full video.
“It looks like at least two of the planned developments in the pipeline we’ve been monitoring will not be condominiums after all, but will arrive as more apartment inventory for rent,” said Jones. “This makes the arrival of NEXUS even more anticipated.”
NEXUS is certainly turning heads given its stunning lifestyle proposition, but its underlying economics are also changing consumer mindsets about renting.
A recent analysis conducted by members of the development, marketing and lending team at NEXUS revealed a typical one bedroom condominium at NEXUS could be considerably less expensive to own than rent, given the nature of low interest rates and a rising real estate market as well as the substantial income tax credits that only homeowners enjoy.
Here’s how a summary of how this scenario breaks down on a typical one bedroom residence (data subject to change):
This hypothetical condominium of 650-sq. ft. (gross architectural measurements) is priced for $568,750 ($825 per sq. ft.) and is purchased with a 5% down payment or $28,438. With a loan amount of $540,312 the principal and interest payments would be approximately $2,658 per month (assuming a 30-year fixed rate mortgage at 4.125% PAR rate) with a preferred credit score of 740 or better and provided this condominium is used as a primary residence by the borrower. Given the higher loan to value, the owner would require mortgage insurance, which is calculated at $265 per month plus there’s property taxes estimated at $427 per month and HOA dues estimated at $480 per month. This totals a monthly cost of $3,830 per month or $45,960 per year. A homeowner, however, also enjoys income tax deductions, which were factored at the 0.28% rate so the effective cost of ownership on an annual basis works out to about $35,412. Factoring the actual cost of the first year must include the additional earnest money deposit (a one time investment), so it is estimated that the total first year cost of housing for a condominium is $63,849.
Now take this math into the second year and the cost of ownership stays the same because the mortgage is fixed, but assuming a 5% median home price increase in the market (recent increases have been substantially higher) it’s fair to suggest this condominium appreciated $28,438 by the second year, which is an equity gain. Repeat this again in a third year and consider the cumulative investment would total $106,236 in cash while the cumulative equity gain could be $58,237 so the net housing cost with appreciation is more like $47,939. Furthermore, the down payment of $28,437 that was invested three years ago is still your money that you get back should you decide to sell and that capital appreciation experienced is likely not taxable given current IRS policies for principle residence gains (up to $250,000 for a single person and up to $500,000 for a married couple). This doesn’t include the cost of selling, which must also be factored.
As an apartment renter, the consumer would still provide a security deposit (typically one month of rent) and at prevailing luxury apartment rents of $4.00 per sq. ft., this 650-sq. ft. unit (gross architectural measurements) would likely rent for $2,600 per month plus parking of $175 per month so let’s say the total cost is $2,775 per month or $35,600 per year. Now remember that rent offers no income tax deduction so this same consumer is paying full taxes, and apartments don’t appreciate (at least not for the resident) so there’s no possibility for capital gains. Conversely, apartments typically experience rent increases annually (Seattle rents rose by at least 40% in the past five years) so if we apply the same 5% increase of rent as we presumed for the condominium appreciation above, then the same apartment would cost more and more each year. By the third year the renter will have paid $104,033 for an accommodation that offers convenience but no financial upside.
Of course, owning isn’t right for everyone. If you plan to stay in one place for more than a few years and the market continues to trend upwards as it has in recent years, however, then owning can provide significant economic benefits for the savvy consumer. And one primary benefit of presales is the price is set at the time the Purchase and Sale Agreement is accepted, so it’s not uncommon for values upon completion to be even higher still.