Dip in Seattle home prices leads nationwide slowdown

For months, Seattle-area home prices have been teetering between growth and decline.

They just dropped over the edge.

The cost of a single-family home in May dipped 1.2% from 12 months earlier, the first negative change in a major U.S. city in a number of years, according to the latest S&P CoreLogic Case-Shiller data.

“Whether negative YOY (year-over-year) rates of change spread to other cities remains to be seen,” said Philip Murphy, managing director at S&P Dow Jones Indices, in a statement. “For now, there is still substantial diversity in local trends.”

Nationwide, home prices have been slowing their gains for the past year — even in the Southwest, where the market is growing fastest. Las Vegas, which overtook Seattle as the nation’s hottest housing market last June, saw gains of 6.4%, still a slight decline over last year.

But an overall fall in Seattle-area prices masks the trend that north and south of Seattle, the market is only getting hotter. In Tacoma and Pierce County, median house prices rose 7.3% in June from 12 months earlier, according to data from the Northwest Multiple Listing Service. (The Case-Shiller index lags by one month and is a composite of prices in King, Pierce and Snohomish counties.) And prices in Kitsap and Skagit County both posted double-digit price increases.

Some of that variation is because prices for less expensive homes, which tend to be outside of Seattle, are still rising.

The Case-Shiller index divides homes into three even tiers: homes that cost more than $625,000, those that cost less than $400,000 and those in between. Of the three, in the Seattle metro area only homes in the least expensive tier posted price increases in May, a 2.74% jump since last year.

Northerly Skagit County, where median home prices hover in the low tier at $380,000, saw an 11.8% increase in prices from June 2018, according to the Northwest Multiple Listing Service data. Realtor Duane Gish, who’s been selling homes in Skagit County for 19 years, said that five years ago the homes he sold were in the $300-400,000 range. Now, they’re closer to $500,000.

While the Northwest Multiple Listing Service data charts growth in some ritzy suburbs like Bellevue and Mercer Island, that’s not the case for the city itself. Prices in the middle tier of real estate are stagnant, the Case-Shiller data shows, while the top tier has been losing value since early this year.

Those top two tiers include almost all the single-family real estate in Seattle proper, where the median home price is $714,600, according to Zillow.

Kelly Meister, a broker at Compass in Seattle, said buyers “don’t have the sense of urgency they did last year,” when prices for top-tier real estate were growing in the double digits.

Right now, she said, “the Seattle market is like a microwave: Super hot in some spots and cold in others.” Houses that would have been “a major grab” last year in neighborhoods like the Central District and Columbia City aren’t getting as much attention in a slower market.

Meanwhile, in tony neighborhoods like Mount Baker, Magnolia and Laurelhurst, there’s still a great deal of demand for “homes that check all the boxes,” said Barbara Shikiar, a Windermere broker working primarily in Northeast Seattle.

“But homes that are more idiosyncratic, in this type of market,” she said, “those tend to linger.”

Nationwide, the Case-Shiller index showed gains of 3.4% over the past 12 months. Growth is slowing because “buyers are no longer willing to pay any price,” Zillow economist Matthew Speakman said in a statement.

Buyers, he said, “took a breather … The fact that buyers — and prices — slowed their roll right through the middle of home-buying season indicates just how few homes are on the market.” And, he said, high land and labor costs mean builders aren’t putting up inexpensive homes fast enough to woo first-time buyers.

Even though home prices in Seattle are dropping, they remain high. A typical home in Las Vegas, the nation’s hottest market, might sell for $274,000, according to Zillow’s Home Value Index, less than half the median Seattle value.

~Katherine Kashimova Long, Seattle Times

Key Indicators Point to Strong Summer Housing Market

KIRKLAND, Washington (July 8, 2019) – Inventory, pending sales and prices all increased during June compared to a year ago, according to the latest report from Northwest Multiple Listing Service. The same report, which covers 23 counties in Washington state, shows year-over-year drops area-wide in both the volume of new listings and closed sales.

“Clearly we now see that the market is moderating – that is we’re definitely moving from a ‘hyper-market’ to one where a correction is underway compared to last year,” remarked Mike Grady, president and COO of Coldwell Banker Bain. “While it’s the best time to buy that we’ve seen in some time, and buyers are getting some relief, it is still a seller’s market,” he added, noting some buyers are experiencing multiple offer situations, or considering inspection waivers, or are even forced to consider markets outside King County for affordability.

Three Northwest MLS directors from Pierce and Kitsap counties suggest their counties are attracting some of the frustrated buyers from King County.

“The darling of the Puget Sound real estate market is Tacoma/Pierce County,” stated Dick Beeson, principal managing broker at RE/MAX Northwest Realtors in Gig Harbor, pointing to low inventory and appreciating values. “The secret is out about Pierce County,” agreed Mike Larson, the president at ALLEN Realtors in Lakewood. “You can buy twice the house for about half the price. You just have to be willing to deal with the traffic if you work north or south of here,” he proclaimed.

“The Kitsap market continues to be robust and is maintaining its velocity in sales,” added Frank C. Leach, broker/owner at RE/MAX Platinum Services in Silverdale. He believes Kitsap County will continue to be strong given its economic foundation together with its affordability factor and quick access to Seattle, but noted it is constrained by available inventory (currently at 1.4 months of supply).

MLS figures show the median price for single family homes and condos that sold last month in King County was $637,675. In Pierce County it was $372,500, about 58 percent of the King County price, and in Kitsap County it was $387,000, about 60 percent of the sales price in King County.

System-wide prices increased more than 3.5 percent from a year ago, from $425,000 to $440,000, although four counties registered declines, including Douglas, Ferry, Jefferson, and King. June’s median price was unchanged from May.

At midyear, the overall median price was $424,517, which compares to $405,000 for the first six months of 2018, an increase of 4.82 percent.

“As long as interest rates stay low and people seek value outside of King and Snohomish counties, house prices should continue their upward momentum,” stated James Young, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington.

House hunters had a broader selection to consider as inventory at month end totaled 16,800 active listings, about 9.5 percent larger than at the same time a year ago. Brokers added 11,977 new listings during the month, a drop from both a year ago when they added, 13,153 new listings, and from May, when they added 14,689 new listings.

About half the counties reported gains in inventory, led by King County where the selection grew nearly 32 percent from a year ago.

“June listing inventory in King County exceeded the levels posted for this month over the past six years,” said John Deely, principal managing broker at Coldwell Banker Bain. “Currently, we are approaching 2012 listing inventory levels,” he noted.

Northwest MLS figures for King County show there were 5,931 active listings at the end June, the highest for that month since 2012 when the selection totaled 6,500 listings.

“Every summer, we see the highest level of new listings and homes going under contract. After the surge of new listings in May, areas close to the job centers saw listings return to the normal seasonal pattern in June,” commented J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

The Northwest MLS report indicates there is 1.76 months of inventory area-wide (matching May), with eight counties having less than two months of supply.

OB Jacobi, president of Windermere Real Estate, commented on a “considerable rise” in the number of listings priced above $1.5 million in King County. “This could be because of the changes to the Washington State Real Estate Excise Tax (REET) that take effect in 2020, which will significantly impact the tax burden of sellers whose homes sell for more than $1.5 million. I suspect we’ll see even more owners of higher priced homes trying to sell in the coming months in order to avoid the hike in taxes they’ll have to pay starting next January,” he stated.

The new tax measure changes the REET rate from a flat 1.28 percent of the selling price to a graduated rate for real property sales, with exceptions for timberland and agricultural land.

Commenting on the latest report from Northwest MLS, WCRER’s Young said “The perfect storm of low interest rates and falling inventory continues along the I-5 corridor, with double-digit house price increases also continuing.”

Beeson says the “new normal” inventory levels of 2-to-3 months of supply, rather than the traditional 4-to-6 months, makes Puget Sound different than most of the rest of the nation. In Puget Sound, homes sell twice as quickly as a traditional ‘normal’ market,” he stated, but acknowledged, “It feels kinda like things have slowed down. Folks are taking deeper breaths.”

Several brokers commented that buyers are becoming more deliberate in their searches and offers.

“Market savvy buyers are taking advantage of premium location and value pricing due to increased inventory. Price reductions are more commonplace as sellers align their expectations with today’s market,” according to Deely. He said demand remains strong, but “buyers are methodical in their search, and taking more time to jump into an offer.” Also, he noted there have been fewer multiple offers and fewer all-cash buyers in the mix when a listing has several buyers lined up to compete.

Buyers are more “tuned-in” than ever before, Beeson remarked, adding, “Buyers today have educated themselves on the vagaries of the home buying process and are better prepared to meet sellers on firmer ground. They are attentive, vigilant, and discerning toward the marketplace, knowing what they want in a home – and they are willing to wait longer to get it.”

Leach concurred. “Buyers are being very careful about what they buy and at what price,” he stated.

Commenting on King County’s numbers for new listings and new pending sales, Dean Rebhuhn said multiple offers are still occurring in the median price range, noting the 1.9 percent dip in year-over-year prices. “Buyers are seeing higher home availability while taking advantage of low interest rates.” Rebhuhn, the owner of Village Homes and Properties in Woodinville, believes those factors, coupled with summer weather and job creation will “continue to create a very active market for buyers and sellers.”

Scott also expects a “quick-action market” for many buyers when new listings come on the market, especially with interest rates in the upper threes. Looking to the months ahead, Scott anticipates strong sales activity close to job centers, while the surrounding area will experience intense, “frenzy-level sales activity” in the more affordable to mid-price ranges.

Larson believes “the big three” – interest rates, the economy, and consumer confidence – all point to a strong summer for the housing market, while contrasting King and Pierce counties. “For years, King County has been a bit like a top fuel dragster – high performing, thrilling, but maybe a bit temperamental. It got the headlines and values skyrocketed, but now it’s experiencing a bit of a hangover. Pierce County’s market is more like a diesel truck – steady, consistent, and less prone to dramatic market changes.”

Larson also offered advice for passive and first-time house hunters. “Every buyer, particularly at the entry level, needs to understand they can’t simply dip their toe in the water when competing for a home. They need to do a belly flop. They need to put their best foot forward right out of the gate.” He also urged buyers to work with a Realtor who understands the market and who can guide them through the process.

Several representatives from Northwest MLS also suggested sellers need to learn the “new normal” as Beeson calls it. “If you overprice your home or fail to get it in good condition for selling, it will cost you time and money in the end, he stated, adding, “Seller’s can’t afford to be tuned out to what the market is saying.”

For sellers in Kitsap County, broker Frank Wilson says pricing is becoming more important. “Our county is starting to feel some of the changes King County has experienced. List price has to more accurately reflect what the home will sell for in today’s market,” explained Wilson, Kitsap regional manager and branch managing broker at John L. Scott Real Estate in Poulsbo. Although Wilson reported multiple offer situations and good traffic at open houses, he emphasized sellers “can no longer chance shooting for the moon, pricewise, or they risk getting stuck on the launch pad.”

Condo activity was mixed during June with year-over-year declines in the number of new listings added to inventory, as well as in the volume of pending and closed sales. Total inventory grew more than 41 percent, although at month-end there was only about 1.9 months of supply. Prices overall were nearly unchanged from a year ago. The median price for June’s sales was $367,000, up about a percentage point from a year ago when the median price was $363,500.

~NW Multiple Listing Service

Seattle makes affordable housing mandatory in upzoned neighborhoods

Architects and developers building across much of Seattle will soon have to meet the city’s new Mandatory Housing Affordability (MHA) requirements, a set of rules passed with a spate of recent comprehensive zoning changes designed to ensure that “new commercial and multifamily residential development contributes [new] affordable housing.”

The MHA regulations were approved this spring and are expected to add over 6,000 new low-income housing units to the city’s housing stock over the next decade. The changes are part of the city’s Housing Affordability and Living Agenda, a three-pronged effort undertaken by city agencies several years ago to increase housing supply in order to stem escalating rents and property values across the thriving region. The fiercely contested changes in land use will allow for a greater level of residential density in many of the city’s neighborhoods and will ask builders to either include affordable housing on-site or pay into a general fund that can be used by city agencies to create new affordable housing in other areas.

The new regulations span five categories of development density, from low-rise detached and row house neighborhoods to taller mixed-use districts where buildings will be allowed to rise to a height of 95 feet or more. The efforts will upzone roughly 6 percent of the city’s single-family zones. Single-family zones ultimately make up over 80 percent of the city’s residential areas.

MHA regulations, according to planning documents provided by the City of Seattle, will be pegged to the degree of upzoning that takes place: Under the plan, areas that have been upzoned most significantly will be required to add a relatively higher proportion of new affordable housing. The required fees administered in lieu of on-site affordable housing construction will start at $5.58 per square foot for projects located in low-rise areas outside downtown Seattle and will go as high as $35.75 per square foot for larger mixed-use developments, according to city agencies.

~Antonio Pacheco, The Architect’s Newspaper

King County housing market soars skyward ahead of summer

After a lull to start the year, the King County housing market is once again headed skyward.

Since February, the median closing price for residential homes in King County has yet to increase by more than 1 percent in any month, even falling by 5 percent in March. That’s not the case for May, where that median price climbed almost 7 percent ahead of the busy summer months.

“We had a pretty robust May,” Windermere Real Estate Chief Economist Matthew Gardner told KIRO Radio’s Dave Ross. “Essentially we saw mortgage rates drop precipitously down to about 4.2, 4.3 percent at the start of the month, down to 4 percent at the end. That got a lot of buyers off the fence.”

With more buyers entering the fray, pending sales in King County jumped 5 percent in May.

Even with that, though, prices are still well below 2018 levels, with the median residential home price falling 3.62 percent year-over-year. Year-over-year prices in King County have dipped in all but one month in 2019. The only exception occurred during February’s slight 0.78 percent bump.

According to Gardner, that’s been driven primarily by an increase in available homes.

“The number of homes are in the market continues to rise, with more choices for buyers,” he noted. “It’s still pretty tight, but we are seeing more inventory.”

While the summer months are typically the hottest both for weather and home prices, Gardner still expects increases to arrive “absolutely at more modest rates through the balance of the year.”

Down south, prices continued to drop in May, marked by a massive 5.24 percent dip in median residential prices in Pierce County.

“If you look at sales prices, let’s say for May — in King County: $645,000. In Pierce County? $365,000. A significant difference,” Gardner pointed out. “Based on affordability, that’s meaning a lot of people are heading down south.”

~My Northwest Staff

April showers brought more good news for home buyers, but inventory is still below ‘balanced’

Good news, buyers: The latest real estate report from the Northwest Multiple Listing Service shows that more balance is returning to the local market.

During April, housing inventory continued to grow, the rate of price increases slowed in many areas (sometimes even decreasing), and mortgage rates remained low. NWMLS statistics saw a 28.5% overall increase in active listings compared to April 2018, and there was a 5.8% gain in pending sales.

Of course, according to NWMLS director John Deely, principal managing broker at Coldwell Banker Bain that’s not news to many buyers hitting the market. After such a long run as the hottest market in the country, many buyers are starting to get smarter about navigating buying a house.

“With an increased supply of listing inventory, low interest rates, and a positive economic climate, buyers are confident that this is a good time to buy,” he reported, while noting a larger number of buyers are opting out of competing with other buyers.
“This year’s buyers and sellers are approaching the market with more caution and a focus on an analytical, versus emotional approach that has ruled the last several years.”

Increased inventory takes a lot of the responsibility for lightening the load on buyers: according to NWMLS, seven counties had double-digit growth in inventory from a year ago, led by King County, which reported a 78.5% growth, and Snohomish County (up nearly 57%).

That doesn’t mean the market is wholly balanced, unfortunately. As NWMLS report notes, though inventory is up drastically in some areas, there’s still just about 1.7 months of supply across the NWMLS’s 23 county system.
“That is still slim compared to the National Association of Realtors’ data showing a national average of 3.9 months of inventory,” Gary O’Leyar, designated broker and owner at Berkshire Hathaway HomeServices Signature Properties, said. “Despite the increase in inventory over last year at this time in King County, we are seeing a very robust spring market laced with multiple offers in many instances.”

Mike Grady, president and COO of Coldwell Banker Bain, put it thusly: “Buyers now have three-to-four weeks instead of three-to-four days to make a decision, so it’s still quite a ways from a balanced market.”

Zosha Millman, Seattle PI

Like spring, Seattle’s real estate season is just getting started

A month out from “peak real estate season” in Seattle, and the local market is still not among the hottest in the country.

That is, likely, more than alright for a number of home-buyers, who might’ve been burnt out from last year’s market which seemed to go nowhere but up in median price. But it’s also a bit surprising — and not confined to Seattle, according to a new monthly report from CoreLogic.

According to CoreLogic’s numbers, Washington’s growth in February 2019 for single-family home prices year-over-year was just 4.6%, only marginally more than the national average, 4%. Both those numbers represent something of a cooldown, according to Dr. Frank Nothaft, chief economist for CoreLogic.

“During the first two months of the year, home-price growth continued to decelerate,” Nothaft said in their most recent report. “This is the opposite of what we saw the last two years when price growth accelerated early.”

That doesn’t mean that housing is suddenly cheap, either locally or nationwide; CoreLogic’s report also looked at the top 50 markets based on housing stock. They found 40% were overvalued, 18% were undervalued, and 42% were at value in February 2019.

And according to Nothaft, the peak season is primed for prices to go up even further.

“With the Federal Reserve’s announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season,” he said in the report. “A strong buying season could lead to a pickup in home-price growth later this year.”

And while Seattle had some other things on its mind in February that might’ve contributed to a cool down, local analysts agree that it’s shaping up to be a good season too.

After all, even with the Snowmageddon, home prices in King, Snohomish and Pierce counties rose significantly, ending the month-over-month declines that started last May. And as CoreLogic notes in their report, Seattle’s market was considered “at value” in February.

“Similar to previous months, prices are moving upwards the most consistently in exurban areas along the Interstate 5 corridor,” James Young, director of the Washington Center for Real Estate Research at the University of Washington, said in the latest Northwest Multiple Listing Service report.

“Look for prices outside the major urban areas to continue rising as the weather improves and the main selling season arrives.”

~Zosha Millman, Seattle P-I

Seattle-area home price cool-down stands out among U.S. cities

The housing market is getting better for buyers across the country, but Seattle’s shifting market continues to stand out compared to other regions.

Since the local market peaked last spring, single-family home prices have fallen twice as fast in the Seattle metro area as in any other region in the country, according to the monthly Case-Shiller home-price index, released Tuesday.

The total drop for the full metro area in that seven-month span, from June to January, totals 6 percent. The typical U.S. city actually saw a slight uptick in home values over that period, but prices dropped about 3 percent in the San Francisco and San Diego regions, and about 1 percent each in Portland and Chicago.

There are a lot of ways to slice the data, though they all show the local market falling behind the national one

On a month-over-month basis, Seattle-area home costs slipped down another 0.3 percent in January, a slightly bigger drop than the national average.

On a year-over-year basis, prices still went up 4.1 percent, but that was slightly less than the national average – the first time that’s happened in seven years.

And even those gains are masked by big differences across the region. As has been the case, prices are growing for low-cost homes typically found in the outer areas of the region like Tacoma, and staying flat in higher-cost places like Seattle.

The index, which covers King, Snohomish and Pierce counties, divides homes into three tiers. For the cheapest group of homes (those priced below $380,000), prices increased 8 percent over the year. But the most expensive ones (homes priced over $605,000), saw prices tick up less than 2 percent, or slightly less than inflation.

In the middle tier, prices grew 4.5 percent.

Overall, the last time the local market was this cool was 2012, back when prices were still bottoming out from the recession.

The cool-down trend is a broad one. The national home-price gain of 4.3 percent over the past year represents the smallest since 2015. Across the 20 metro areas tracked by the index, only Phoenix saw bigger price gains in January than in December. Las Vegas was the only region in the country where price increases topped 7.5 percent.

There are signs that the local market has bottomed out, however. More recently, prices in February grew $45,000 in King County, the most ever for a single month in dollar terms, though that bounceback isn’t yet reflected in the national Case-Shiller data, which lags behind by a month.

The current median cost of a single-family house is $655,000 in King County, $475,000 in Snohomish County and $355,000 in Pierce County. The Pierce County figure is tied for a record high, while King and Snohomish are well below their peaks reached last spring.

~Mike Rosenberg, Seattle Times

Market turnaround? King County home prices take biggest one-month jump ever

King County home prices had dropped $116,000 since last spring, falling to a two-year low in January.

But in February, home prices bounced back as the median sale rose by $45,000 from the month prior, according to new data released Wednesday. It was the first time in eight months that prices actually went up, on a month-over-month basis.

And it was no small increase, either: In dollar terms, it’s the biggest one-month jump since records have been kept.

One month of data does not necessarily guarantee a new trend. But there’s evidence the market could be picking up speed as buyers start slowly coming out of the woodwork: Sales increased 1 percent on a year-over-year basis, a small amount but nevertheless the first increase since April 2018, back when Seattle was still the hottest market in the country. Brokers and buyers are reporting more traffic in open houses and the slow return of bidding wars.

And while prices usually grow in February coming out of the winter doldrums, this year’s bump was triple the average increase from the previous five years. It’s an ominous sign for buyers, given that prices almost always rise the most in spring, which is just around the corner.

King County’s median single-family house sold for $655,000 in February, up 7.4 percent from a month prior but still comfortably below record highs reached last spring, according to the Northwest Multiple Listing Service.

“Everything has picked back up,” said Grant Burton, a Seattle-based Redfin agent. He’s working on two buyer offers right now, and has four pending sales — all featuring bidding wars, which had all-but disappeared in the second half of last year.

“When we noticed the cool-down last spring, buyers were fatigued, they were burnt out on the crazy market and not having enough time to do their due diligence,” Burton said. But then things went in the opposite direction — homes sitting unsold longer, prices being negotiated down — for long enough that buyers have started to feel comfortable enough to come back.

“It helps that there’s more inventory, and having more time (to decide on a house) has been a little bit easier for buyers to digest. And I think maybe people were trying to take advantage of not as many buyers to compete with,” he said.

The market isn’t back to red-hot by any means. On a year-over-year basis, prices rose a bit less than 1 percent. And the number of homes sitting unsold still doubled in that span. Brokers say instead of bidding wars with 10 buyers driving up prices way above the list price — which was common for years — now there might be two or three bidders on sought-after homes, willing to go slightly above list price.

In Seattle, the median home price hit $730,000, up from $711,000 the previous month but still down from a year ago.

The biggest gains came in Southeast King County, where prices grew from $450,000 to $473,000 in the last month – led by gains of $100,000 in Renton.

But the turnaround hasn’t started on the Eastside. There, prices fell to $900,000 — down from a month ago and a year prior.

Also helping nudge buyers back into the market: mortgage interest rates, which had grown last fall, have fallen back down in the last few months.

Despite a shift in single-family home values, condo prices continue to fall — down 8.4 percent from a year ago across King County, the biggest decline in seven years. The median condo across the county sold for $380,000, down from a record high of $466,000 last spring. The number of condos sitting unsold more than tripled in the past year while sales continued to decline.

The cool-down also continues in Snohomish County, where the cost of the median single-family house fell 2.1 percent from a year prior — the county’s first annual drop since 2012. The median Snohomish house sold for $475,000, down from last spring’s peak of $511,000.

Pierce and Kitsap counties, which have been mostly immune from the recent slowdown as buyers seek out cheaper alternatives, continue to see prices grow.

In Pierce, the median house sold for $355,000 — up 9.2 percent in the past year, and matching the record highs reached last spring. In Kitsap, prices grew 3.7 percent, to $341,000.

~Mike Rosenberg, The Seattle Times

CEOs of Seattle area’s biggest companies: We need more housing for the middle class

The CEOs of King County’s largest businesses — from Amazon and Boeing to Starbucks and Nordstrom — are pushing for more housing for middle-income workers at a time when professionals like nurses, teachers and cops are increasingly being priced out and new housing is aimed mostly at higher earners.

Challenge Seattle, a group of 17 local CEOs led by former Gov. Christine Gregoire, released a report Wednesday that amounts to a call for action on more housing aimed at households making between $54,000 and $108,000 (or less for individuals). The group also includes the chief executives of Microsoft, Costco, Zillow, Weyerhaeuser, Alaska Airlines, Expedia and the Bill & Melinda Gates Foundation, among others.

Except for Microsoft, the companies thus far have not contributed their own financial resources to spur investment in new housing. Instead, they are advocating for things Gregoire concedes should prove challenging to implement, like zoning reform and changes to real-estate investment that could lower profits.

The basic problem is this: Over the past decade, local home prices and rents have soared twice as fast as incomes. The biggest impact has been on low-income residents, but now about 40 percent of middle-income earners spend more on housing than they can afford (defined as more than 30 percent of their income).

Seattle and a couple of suburbs have seen an epic building boom, yet new housing aimed at middle-class workers has been almost nonexistent.

This decade, 85 percent of new county apartments have been luxury units where rents top $2,000 a month — developers do that because it’s the most profitable. On the other end, some nonprofits and public agencies have been building subsidized housing aimed at the lowest wage earners, helped by tax credits and gifts that make those projects work financially.

The report outlines some of the effects: A local utility, apparently Puget Sound Energy, has just three after-hours responders left living in the service area that spans Renton, Bellevue, Kirkland, Mercer Island and Newcastle, slowing response times. Local cops, even the police chief of Bellevue, have had to move to cities outside where they serve. The share of commuters driving at least 90 minutes one-way has grown 70 percent this decade.

“If a community cannot provide housing to those who are the heart and soul of it — those who respond to disasters, provide health care, teach our kids and so on — then what kind of community is that to live in?” Gregoire said in an interview.

The group asks local governments to relax zoning laws to allow for more density, especially near transit. That will be a tough sell in suburbs where housing construction is already weaker than its historical average as residents fed up over issues like traffic and noise fight to protect single-family neighborhoods. However, mayors of nine local suburbs, at the urging of Challenge Seattle and Microsoft, recently signed a letter committing to consider such changes.

The CEOs also ask governments to reduce impact fees that help fund projects to offset some of the issues development exacerbates, like traffic, to reduce construction costs. It wants the state to relax laws that make it easier for condo owners to sue developers in hopes the change would spur more condo construction, an effort already underway in Olympia this session. And it wants tax credits used to finance low-income projects to be extended to projects aimed at middle-income earners.

The group also wants to challenge the real-estate industry to essentially make less money in the short term, which figures to be an even harder sell. For instance, it wants socially conscious banks and investors to make loans for middle-income housing with below-market interest rates; asks equity partners that invest in developments in exchange for a stake in the project to receive their profits in smaller chunks over a longer time frame; and wants lenders to provide short-term loans for land, the riskiest time for investors to give out loans because projects aren’t certain at that stage.

Microsoft, a member of the coalition, made a big splash earlier this month with plans for a $500 million housing fund, including $225 million in loans to help finance middle-income housing at below-market interest rates. But no other member of the group has committed to spending its own money on the problem, even as the housing crisis affects their employees and communities where they are based.

Gregoire said the group will consider in the coming weeks creating a housing lending fund similar to Microsoft’s, with its member companies and perhaps other local businesses and even private citizens eligible to contribute.

“We’re by no means done,” she said.

~Mike Rosenber, Seattle Times

Newest data predicts return to balance for Northwest housing market

The latest data and estimates from a handful of Northwest Multiple Listing Service real estate professionals paint a picture of a much friendlier housing market for buyers in 2019.

As 2018 rolled to a close, the housing market in the Northwest saw a noted increase in eager sellers.

“Buyers in December were reaping the benefits of market-weary sellers who were willing to give up part of their bloated home equity to make a deal and move on,” said John Deely, principal managing broker at Coldwell Banker Bain, in the NMLS report.

That was confirmed by members across the NMLS, including Windermere Real Estate President OB Jacobi.

“The year ended with more of a splutter than a bang as home price growth continued to slow in December,” he noted.

That was rounded by a median closing price for houses of just $639,000 in King County, down from the 2018 high for the county of $726,275 back in May.

Ultimately, according to Jacobi, this is “bringing us closer to a more balanced market,” predicting slowed growth for home prices through 2019 (around 5.5 percent he estimates).

The reasoning for this drop can be found in a variety of factors, including unsustainable home price growth, rising interest rates, and a drop in consumer confidence.

The outlook for the year ahead continues to look positive for home-buyers, who may find that acting quickly might serve them best.

“Buyers should act now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,” advised Dick Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.

Among the buyers in the market will be plenty of first-timers, as more millennials get married, have children, and build their respective households.

“Although many of them will face significant obstacles to buying due to student debt, lack of down payments, and Seattle’s high-priced housing, this group is likely to buy more homes in 2019 than any other demographic,” Jacobi predicted.

That being so, pushing out to more remote areas outside of Seattle’s expensive market is starting to drive up prices everywhere. The NMLS’s report noted that demand in those outlying markets has driven up prices in counties like Cowlitz, Lewis, and Thurston 12.4 percent over the last year.

Meanwhile in King County, condo listings have quadrupled in the last 12 months, as buyers look for alternatives to pricier houses.

All this remains consistent with a prediction from Redfin at the end of the 2018, where they expected “demand to cool the most” in 2019 for a handful of major markets across the country, including Seattle, Portland, and San Francisco among others.

~My Northwest Staff