On June 12th, I joined my fellow Realogics Sotheby’s International Realty brokers Anastasia Miles, Cindy Paur, Maja Butler, Nancy Klinck, Rosemary West and vice president Stacy Jones at the 15th Annual Ladies on the Links Golf Tournament & Luncheon, a fundraising event to benefit The First Tee of Greater Seattle. The successful day included a 9-hole game and scramble with gifts at each hole, and a live and silent auction at the Broadmoor Golf Club as guests gathered for an incredible lunch.Read More
The June 9th print edition of the Puget Sound Business Journal revealed the list of Largest Residential Real Estate Firms in Washington, ranking Realogics Sotheby’s International Realty sixth overall, an apropos position given that it is the firm’s sixth consecutive year on the list. Ranked by 2016 residential home sales in the Puget Sound region, RSIR reported $1.07 billion in local residential sales last year. Most notably, despite being smaller than any of the brokerages in the top 5 spots at 195 agents, the boutique brokerage reported an average sales price of $767,000, higher than the average of each of the top 5 firm’s by at least $225,000.Read More
Following a record apartment construction surge that delivered more than 12,000 new rental housing units in downtown Seattle, it’s curious that, since 2011, only 866 condominiums were added. What’s more extraordinary is that so few of those new condominiums remain available to purchase today. Simply put, 99-percent of what was built for sale in the last five years has been sold and more than two-thirds of what’s planned for delivery by 2019 is already reserved through priority pre-sale.
Among the few planned condominium buildings in the downtown area is NEXUS – a 41-story, 382-unit high-rise, located at 1200 Howell Street, is slated to break ground in January 2017 with occupancy by mid-2019. Its developer, Vancouver-based Burrard Group, took a unique stance on the market by choosing to build for sale, while 94-percent of the historic supply was built for rent. A demand to own was clearly underscored by hundreds of pre-sale buyers lining up on June 4th, some of which slept overnight, in order to secure a reservation for priority pre-sales. Reservations are offered for a $5,000 refundable deposit and provide prospective home buyers with a unit specific and first right of opportunity to purchase when the homes are officially released for sale in the New Year.
NEXUS reservation holders are savvy and now enjoy a preferred position in the next development cycle, according to Michael Cannon, Sales Director for the development.
“Our buyers realize the market is rising and see the value of securing an option to purchase without fear of multiple offers, price escalation or worse – missing out on the opportunity to purchase a home in one of the few developments likely to deliver before 2020,” said Cannon. “NEXUS isn’t quite like anything that has been offered before in downtown Seattle – progressive architecture, flexible floor plans, robust amenities, and high-tech features – NEXUS has become an exclamation point on the buy vs. rent debate.”
Cannon believes an unprecedented number of apartment dwellers are considering their options with ownership, especially at more attainable price points below $600,000, as down payments require are set at 5-percent of the purchase price and mortgage payments are typically the same as prevailing rents in comparable apartments.
The app allows users to fully immerse themselves in a luxury real estate experience and explore the world’s most extraordinary properties with a expertly curated selection of high resolution photography and high definition video.
Using Siri voice dictation, users can browse properties by city, state, or country or explore the lifestyle categories; whether you are interested in a metropolitan experience or you are a wine connoisseur interested in vineyards and wineries.
Find a property that sparks your interest? You will be able to contact a sales associate directly through the app.
Download the app today on the Apple TV app store. Search for “Sotheby’s International Realty”
To learn more please visit: Sotheby’s International Realty | Apple TV App
A new report by Cicely Wedgeworth for realtor.com has shown that the 2017 housing market is going to be shaken up by an influx of prospective first-time millennial home buyers. Here is what you need to know:
The Great Real Estate Revolution Of 2017
According to a recent survey by realtor.com, in 2016, only 33% of people planning on purchasing a home were first-time buyers. This upcoming year, however, is slated to see a dramatic increase in this demographic, which is expected to jump to 52%, of which, a staggering 61% of perspective buyers are under the age of 35. This means that the 2017 real estate market will subsequently see an increase in competition for housing amongst first time home buyers.
Competition Will Be Intense
With this influx of first time millennial home buyers, the competition for housing within the real estate market will be more substantial than 2016. Jonathan Smoke, chief economist for realtor.com, recommends trying to “’avoid bidding wars and higher prices spurred by a potential increase in millennial buyers’” by considering a winter home purchase. When examining the 2017 real estate market, it is also important to investigate which types of properties will be the most sought after.
In 2017, more millennials will be moving away from renting and towards first time home ownership. With this trend, we see a migration of this demographic away from urban areas and towards the suburbs. According to the recent realtor.com survey, both 50% of millennials and baby-boomers report interest in living either in the suburbs or outlying suburbs. This trend will create increased competition within the market for properties located in these areas.
Baby-Boomers And Millennials Competing Within The Real Estate Market
It seems that the suburbs are not the only thing that baby-boomers and millennials can agree on. With millennials prioritizing a sound financial investment, there will be a focus on “safety, privacy and more space” according to realtor.com. There is expected to be an increase in this demographic seeking single-family homes and townhomes. Babyboomers have a similar focus within their demographic, with 71% of perspective buyers seeking single-family homes.
With both demographics seeking these types properties, it can be expected that these single-family homes will be in high demands, driving costs upwards and availability down.
To read more, please visit: Realtor.com | First-Time Millennial Buyers Poised to Revolutionize the Real Estate Market in 2017
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.
Select Links Below to View Full Calendar of Events in Each Community
Bainbridge Island Events >> ♦ Seattle Events >> ♦ Eastside Events >>
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.
Select Links Below to View Full Calendar of Events in Each Community
Seattle Events >>> ♦ Eastside Events >>>
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.