Changes in Seattle Housing Market

The Seattle Real Estate Market – WHERE TO START???

I don’t even know where to start!  So much housing related info came out this week…  I guess I’ll just let the bullet points tell the story:

·         Seattle passed sweeping short-term rental laws

o   Hosts for AirBnB, VRBO, HomeAway, and other short term rental platforms can now only rent out two dwelling units (including a room in the host’s primary residence)

o   Hosts must now be licensed, which means they will likely be taxed by the local government for operating a short-term rental

o   Overall, this should help preserve an adequate supply of long-term rental stock for the city’s permanent residents

§  Effect on local housing market – Neutral

·         Amazon hiring has slowed dramatically

o   As recently as June, Amazon had over 9,000 job postings for Seattle-based jobs…There are only 3,503 postings for jobs currently

o   This is the fewest Seattle-based job postings Amazon has had in almost 4 years

o   Nonetheless, the 3,503 postings is still more than the combined postings for Microsoft, University of Washington, Nordstroms, and Starbucks

§  Effect on local housing market – Slightly not good… but an additional 3,500 highly paid employees still adds a lot of pressure on an already pretty tight housing market (currently 458 homes for sale out of 129,331 total single family residences), so we may not notice a difference.  Nonetheless, it’s something to keep an eye on

·         New Tax Plan

o   Interest deduction on home equity lines of credit goes away

§  Effect on local housing market – Neutral

o   Interest deduction on mortgages up to $750,000 (used to be up to $1,000,000)

§  Effect on local housing market – Slightly not good

o   State and local taxes (SALT) deductions capped at $10,000

§  Effect on local housing market – Slightly not good

o   There was no change in the requirement for people to qualify for the gain-exclusion on sale of a personal residence.  It was talked about that the current gain-exclusion of living in the house 2 out of the last 5 years was going to increase to 5 out of the last 8, but that didn’t happen. 

§  Effect on local housing market – If the gain-exclusion increased to 5 out of the last 8 years, then we would have less sellers, and therefore prices would rise.  However, nothing happened, so housing is unaffected

·         Overall, the new tax plan will put downward pressure on higher priced homes.  Seattle’s current median home price is $754,000…  so the vast majority of us aren’t affected yet (since a homebuyer did put some money down on that $754,000 purchase price), but the tax plan could play a larger role in the next couple years as Seattle home prices continue to appreciate

BoardingHouse Rooms for Rent

Paul Dorpat reported in the Seattle Times magazine about  a large mansion built in 1900 at the corner of Ninth Avenue and Columbia Street in Seattle's First Hill. It was a boardinghouse in the early 1900's, called The Sunset, and was managed by the progressive Emma A. Hausman, "one of the most prominent club women in the city."

Emma Hausman had purchased this residence from the Archibald Graham family in 1916 with the intent of opening "a first-class boardinghouse for particular people."

According to the 1937 tax record, this neoclassical mansion featured 27 rooms, including seven on the first floor and eight on the second, all with nine-foot ceilings. There were seven more in the attic and five in the daylight basement. The Sunset offered several rooms for rent, with ads such as this from the Seattle Times on June 2, 1917:

"Mrs. Hausman has one large room, suitable for man and wife, two businessmen or young ladies. First class in every particular..."

The mansion was demolished in 1966 to make way for new developments.

City regulations now prohibit more than eight unrelated people from occupying a Seattle residence, so the days of boardinghouses like this one are long gone - and so too, options like this for more affordable living arrangements in the city of Seattle...

Happy Investing!

Seattle Low Income Housing

Capitol Hill Housing poses the following thought:

Imagine you were hit with an unexpected medical bill for $400. Would you pay it off in cash? Put it on your credit card? When the Federal Reserve asked American consumers this question, a shocking 47% of respondents said they would not be able to cover an expense of that size.

The survey points to a troubling reality: many people across the country are living paycheck to paycheck. In Seattle, there are over 40,000 low-income households spending more than half of their income on housing, squeezed more and more as rents rise.

When most of your earnings go to keeping a roof over your head, the line between being stably housed and on the street can be very fine. Back in July of 2015, the Committee to End Homelessness in King County presented a study showing that an increase of only $100 in median rent corresponded to a 15% increase in the homeless population.

I am often asked what role CHH has in addressing the homelessness crisis. The answer? A large one. We don't run homeless shelters, or tent cities, or conduct outreach. But we do own or manage over 1,400 affordable units across the city, and for many of our residents, an affordable place to rent is the difference that keeps them off the street.

We also know that getting people into housing is often only the first step on their journey home. Our resident services staff works tirelessly to connect tenants to resources and opportunities in the community. And when folks fall on times of financial hardship, we provide emergency one-time rental assistance to those who complete a financial education class, to try and keep as many people in their homes as possible.

For families that are making just enough to scrape by, quality, affordable homes close to jobs and public transit can make a world of difference. Next year we are excited to break ground on the 115-unit Liberty Bank Building project, our largest yet. It represents our commitment to make sure that as Seattle grows and changes, we continue to offer housing for people at all income levels. When growth happens, it should help lift all residents, not push some out. 

Chris Persons returned from his three-month sabbatical this week, so this will be my last time on the soapbox. We're all glad he had some time to recharge his batteries, but also excited to welcome him back. May his renewed energy be infectious as we rise to meet new challenges and opportunities in our ongoing fight to keep Seattle affordable for all.

Today's blog courtesy of Jill Fleming, Acting CEO, Capitol Hil Housing

Happy Investing.

Homeless in Seattle

Last weekend Allie, Jack and I were at Greenlake when Kiro7 pulled up and asked to interview us on the subject of homelessness.  Long story short, according to the news crew there’s a bill being put to a vote at the Seattle City Council for whether or not we should allow homeless people to camp in “Safe Places”.  I’m all for keeping the homeless safe, but the “Safe Places” they were voting whether or not to allow homeless encampments were parks like Greenlake (which is where we were at the time we were asked to interview), Gasworks and other city parks.  This has got to stop. 

Seattle is becoming one of the most prosperous cities in America.  However, as our incomes and housing prices rise, so does our homeless population.  What’s the deal with that?  The 2016 One Night Count of Homeless in the Seattle and King County area (coordinated by Seattle/King County Coalition on Homelessness - SKCCH) tabulated just over 4,500 people sleeping on the streets in Seattle.  That’s a 63.28% RISE since the bottom of the Great Recession in 2010.  Are you kidding me right now?  There were less homeless during the Great Recession than there are now?  While Seattle as a city has outpaced much of the country in economic recovery, we’ve also increased the number of people sleeping on the street by over 60%.  This is so absurd to me that I can barely even organize my thoughts right now.  All I know is that I love our city – I love the culture, I love the relative safety, I love the beauty, and I love our growing economy  ß all things that will be negatively impacted if our resolution to homelessness is to expand their camping boundaries and allow them to camp in our parks.   In the end, I want everyone to know that I support helping the homeless find safe shelter and homes (but not more campsites).  They’ve had a rough go, and helping them doesn’t only change their lives, but all of our lives. 

Please Note:  As of last Thursday, the city is heading in a new direction to resolve the issue of homelessness.  We’ll see how it goes, but I’m at least relatively content knowing they’re trying. 

The One Night Count from 2010 through 2016 for those living without shelter are as follows:

Year	Count	Citation
2010	2,759	[6]
2011	2,442	[7]
2012	2,594	[8]
2013	2,736	[9]
2014	3,123	[10]
2015	3,772	[11]
2016	4,505	[12]

Today's blog courtesy of Kyle Bergquist, Guild Mortgage Company

Latest Housing Trends

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, my dear blog readers, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general. 

Please click on this link to view the Housing Trends July 2015 Newsletter http://wendywonder.housingtrendsenewsletter.com 

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, Realtor.org reports and other sources.

Housing Trends eNewsletter is filled with local and national real estate sales and price activity provided by MLSs and the National Association of Realtors, U.S. Census Bureau key market indicators, consumer videos, blogs, real estate glossary, mortgage rates and calculators, consumer articles, and REALTOR.com local community reports. 

If you are interested in determining the value of your home, click the “Home Evaluator” link for a free evaluation report: 

http://wendywonder.housingtrendsenewsletter.com/dispContent.cfm?loadid=2&loadtype=0 

Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future. 

Happy Investing, 

Wendy Ceccherelli
Home Land Seattle
PO Box 221013 Seattle WA 98122
4252707292 
HomeLandInvestment@gmail.com

Haves and Have Nots in Seattle

98118 is one of the hottest zip codes in Seattle right now. In the last six months, there were 253 residential sales, with an average sales price of $349,950. A year ago, the median home price was $345,000.

Compare this to the trendy Ballard neighborhood, where 314 homes sold in the 98117 zip in the past six months at a median price of $549,450. A year ago, the median home price was $477,500.

There is more than twice the active listing inventory in 98118 (59) than in 98117 (25).

Nothing demonstrates the rising inequality gap between the haves and have nots in the City of Seattle than these two comparisons. While Seattle is becoming increasingly more white, increasingly more affluent, those who can no longer afford the pricey north end neighborhoods are moving to the south. Increasingly, 98118 is seeing that influx of investors and new homebuyers looking for affordability, with proximity to jobs in Seattle city center.

Yet the bulk of the wealth and appreciation are taking place in the north end of the City, where home prices are back to or even above their pre-bubble prices.

For investors, and others looking for working-class neighborhoods in which to invest at more affordable prices, the south end offers some growth opportunities. In the north end, expect the bidding wars to continue, as inventory remains very tight.

Happy Investing!

Puget Sound Economic Forum

Last month I attended the Second Annual Economic Forum sponsored by Pacific Continental Bank. Panelists included Roger Busse, president and chief operating officer of Pacific Continental Bank; Dr. Fariba Alamdari, VP marketing, Boeing; Steve Johnson, director of the City of Seattle's Office of Economic Development; and Erik Ristuben, chief investment strategist for Russell Investments.

Overall, panelists predicted a mediocre recovery in US financial markets, with world GDP growing at a much faster rate; Europe remaining a threat on the verge of a "fiscal cliff" that could impact economic recovery in the US (see my previous post for some insight as to the links between the US and world economies); and Seattle in particular doing well in this post-recovery period. Boeing is a major player in the region's economic health and their growth forecast is very healthy.

Currently, the US government spends 24% of GDP, but takes in only 15% in taxes, one of the lowest tax receipts since the 1950s. When the US last balanced its budget under the Clinton administration, it spent about 19% on GDP and took in the same percentage in tax revenue. This is sustainable, Mr. Ristuben argued. Spending must go down, and tax revenue must go down in order to balance our budget in the long run.

Ristuben characterized the velocity of money as "moribund," but did not consider inflation to be an immediate concern. Johnson quoted Thomas Friedman in the September 8 NY Times as stating, "More than ever now, lifelong learning is the key to getting into, and staying in, the middle class."

In terms of publicly-traded equities, REITs have been the best performing asset class in the recent past. So real estate has outperformed other equity classes, demonstrating once again that investment in real estate makes financial sense.

Panelists were particularly optimistic about Seattle's economic prospects for the future. Seattle was recently ranked as the seventh best commercial real estate market in the United States. Apartment vacancies are down to 3.8% and rents are up 2.7%. Construction permits are up 50%. Job growth is up 5.1% and unemployment is down 1.3%. This job growth is more than double that of the United States average, and more than three times that for the rest of the state.

Talent is attracted to Seattle's vibrant neighborhoods. The economy has become extremely diversified as it transitioned from resource extraction to industrial and manufacturing to today's economic engine with high tech, Boeing, and biotech among the major employers.

Concerns centered around recent City Council decisions regarding the sick leave ordinance, and non-disclosure of criminal backgrounds. In addition, the Port of Seattle competes rather than collaborates with the neighboring Port of Tacoma; which means that both will lose out to port traffic in Los Angeles, the Suez, Panama, and Lake Rupert, Canada.

Overall, most panelists described the economic forecast for the region to be "cautious optimism."