The recent shift in Seattle home prices have some people worried and many asking what is causing the market to cool off. There are several factors that have come into play that are contributing to the slowing, however one thing should be clear: The home prices are still rising, just not as quickly as before – The boom isn't over yet.
Is it Amazon?
Amazon, the tech giant, is headquartered in Seattle and has brought a huge influx in jobs and economic growth into the region, but in 2017 it announced plans to open a second headquarter location elsewhere in the United States or Canada. Dubbed H2Q, the search for a new headquarter location was widely publicized and cities all over the country began competing for Amazon's attention. Some economists warned these cities about the potential pitfalls to having Amazon open shop in town, including driving up home prices to unaffordable levels for existing residences looking to buy and also increasing rent. More positive about the outlook than concerned, cities have focused their hopes of landing H2Q on the opportunity to grow and recover from economic downturns experienced after the 2008 recession.
When Amazon announced the search for HQ2, some Seattleites feared Amazon would be downsizing it's operation in the Pacific Northwest. Amazon has said that they have no plans to close or scale back their Seattle headquarters and that the new location will be equal to it. This is good news for Seattle because Amazon currently provides over 40,000 jobs and occupies nearly 19% of the city's prime office space. Amazon plans to have continued growth in the area and will announce the location of their second (but equal) headquarters by the end of 2018. While the market is cooling off and making home ownership more affordable for first time homebuyers and renters, the tech industry's hold on the local economy should remain strong with Amazon's continued commitment to the Seattle headquarters.
A Rise in Homes on the Market
Since the market began it's rapid rise, King County, home to Seattle and Bellevue where the tech giants call home, and surrounding Snohomish and Pierce Counties have seen a surge of new homes hitting the market. Snohomish County is home to growing communities to the north of Seattle such as Everett, Lynnwood, Marysville, Lake Stevens, Bothell, and Mill Creek. For quite some time new housing was struggling to keep up with buyer's demands and the housing market was spiking quickly. These new homes, in addition to older homes going on the market, have made a more noticeable impact with the recent shifts. Now that the market has begun to slow, the effect is causing buyers to hold off their offers and homes are sitting a little longer. This increases the available inventory and sellers are dropping home prices in order to be more competitive with other houses in the area. According to Zillow, the inventory of single-family homes is up 86% from this time last year.
While this may frustrate some sellers who are looking for a bidding war, buyers are seeing an opening for the first time in years and they're happy about it. Now is a great time for first time homebuyers to make a plan of action to get into the market and evaluate what areas and types of housing would be the best buy for their money.
If Seattle isn't #1, who is?
It turns out that Las Vegas has stolen the number one spot. Sin City has seen rising home prices, but the median home price in Seattle is still three times higher than Las Vegas!