This month, the Seattle real estate market continued to show just why it’s such a dynamic and profitable place for the savvy investor. October continued the trend of the Seattle real estate market continuing to show a strong recovery compared to the weaker trend we see happening nationwide currently. In fact, according to a recent survey for the hottest real estate markets in 2013 by the Urban Land Institute, Seattle real estate is currently ranked seventh. Not bad for a market that was once deflating at a pace not seen since the Great Depression.
The Urban Land Institute cited among its many reasons for ranking Seattle real estate so high because of the high quality of life, a diverse economy and development. Another big advantage for Seattle was its walkability and public transit score (meaning residents of the city could easily reach their destination without using their own car). As the expense of owning a car continues to rise, a lot of homebuyers are looking for a place to settle where they may not need a car. Modern homebuyers (especially younger professionals) are looking for a place with good public transportation and a low impact on the environment. Some experts have even been heard to say that Seattle should be considered as a primary market in the same league as San Francisco and New York. If this recovery continues at this pace, it’s not outside the realm of possibility that Seattle will become the San Francisco of the Pacific Northwest.
Unemployment in Seattle continues to improve as well. In fact, unemployment in King County has fallen to 7% far below the nearly 9% we saw during the height of the recession and well below the national average of 7.8%. In fact, it’s even lower than that of neighboring states like California and Oregon who still have unemployment rates closer to 10%. The job momentum and growth continues in the technology and online industries in Seattle which has helped lead this robust housing recovery. Many larger corporations lured by Seattle’s welcoming atmosphere have begun to move operations there. In fact, Amazon recently opened its much publicized campus in Denny Triangle this past summer and is currently staffing up to fill up the planned three towers they are building.
Best of all in the Urban Land Institute report is the recommendation to invest in office space. After the recession hit, a lot of office parks were devastated by low occupancy rates. Many office parks were forced to close as the businesses contained within went out of business or otherwise bankrupt. Now, with the Seattle economy showing so much strength, a great deal of experts are saying that now would be the perfect time to invest in office space and get in before the housing boom takes off in Seattle once again.
It’s not just commercial real estate in Seattle that’s seeing a nice boost in sales. Industrial real estate has shown a strong comeback in the area as companies that are interested begin to make investments in an area that they see as a crucial link between the US and Asian markets. The industrial-to-mixed use areas are especially hot right now as they are able to accommodate more types of companies.
Home prices are continuing their rise in King County with Seattle proper being especially elusive for interested homebuyers. In fact, Bellevue is said to be expanding so much, it should be another market close to Seattle that’s showing a strong return for investors. Nationally, housing construction grew by fifteen percent – unquestionably the best showing it’s had over the last four years.
The demographic shift continues from suburbia to city centers. The best city centers right now are benefitting from an influx of workers who are looking to shorten their commutes and find a better paying job. Those jobs right now appear to be concentrated within the cities – opportunities begin to become sparse the further away you go from Seattle. During the housing boom, contractors, and investors created a glut of inventory in suburban neighborhoods. As we see the available inventory in the city begin to wane, suburban investments should become lucrative once again. It may actually be a better time to buy in suburbia if you’re looking for a longer term investment. City side apartments and condos are the hot things right now and won’t stay on the market for long – this might reduce the overall profit you might realize from investments in Seattle real estate, but there is still plenty of money to go around.
The report was quick to caution that we are unlikely to see anything like what we had during the 2000’s boom time in Seattle real estate. In fact, after a devastating economic collapse, a moderate recovery is exactly what we’d expect to see as investors, homeowners and young professionals pay down their debt loads. There are other extenuating factors that the report did not take into account, but you should. Uncertainty with the Eurozone – especially the question of whether or not Greece will continue to be part of the Euro – could create an upheaval once again in the US economy forcing the recovery back to the beginning. The much publicized “Fiscal Cliff” created by Congress last year as part of raising the debt ceiling is also due to begin on January 1st and Congress hasn’t implied what they will do to avoid that yet. So, while there is a lot of good economic news right now, there is still a lot to be cautious about that could send home prices back into the toilet. Still, 2013 looks to be a very good year for the Seattle real estate market and for the savvy investor.
Other hot real estate markets in the Urban Land Institute survey to keep an eye on included:
1) San Francisco
2) New York City
3) San Jose
8) Washington D.C.
9) Dallas/Ft Worth
10) Orange County