Over the last 10 years, Seattle has experienced an extraordinary boom in its population, and with it, the housing market in the city has exploded. Since 2010, Seattle has grown from a little more than 600,000 residents to almost 745,000, according to the U.S. Census Bureau’s last estimate in 2018. That represents a dramatic 22.4 percent increase in population, and much of it is due to the city growing into a tech powerhouse.
Behemoth companies such as Amazon, Google and Facebook have all invested heavily in Seattle and the metro region over the last 10 years, attracting highly skilled workers in the process. What this has done is significantly boosted the demand for housing and, therefore, its price. The median home price in Seattle was $420,000 in 2010, but has since grown to $720,000.
These high prices started scaring investors off from Seattle over the last few years, as they figured they must’ve missed the boat. But there are still plenty of reasons why the market is prime for real estate investment.
Investment Considerations for Seattle Real Estate
Investors should consider the following factors when looking to invest in the Seattle real estate market:
- Affordability – It might be better categorized as a lack of affordability. That extremely high median home price can make it difficult to get a good return on investment. But after years of skyrocketing prices, there have been declines over the last year or so. Values declined by 2.4 percent in 2018, according to Zillow, and they are projected to decrease slightly again in 2019. When prices fall, opportunities often rise.
- Rental market– One thing real estate investors often overlook is each state’s laws when it comes to investment rental properties. The good news for Seattle investors is the state’s rules are very favorable. There is no rent control in Washington, meaning you can raise rents to keep up with inflation and other rising costs. In addition, there is a large demand for rental housing, as more than half of the residents in Seattle rent, compared to one-third of people in the rest of the country.
- Economy – When you think tech hubs, Silicon Valley is the first place that comes to mind. But Seattle is quickly drawing attention away from the Northern California region. Combined with other strong industries, Seattle has a diverse economy, which keeps people coming to the city and region.
- Inventory– One of the biggest recent trends in the Seattle real estate market is the shift from a dramatic shortage in inventory to levels that are more normal. For real estate investors, this means there will be more properties to choose from and more deals to be found than even just a few years ago.
The Best Markets/Neighborhoods to Invest in Seattle
A good place to look is just outside of Seattle to the southside – an unincorporated town called White Center. It’s a short 8.1-mile commute to the city, has a good school district, has lower median home prices ($385,300) and provides public transportation access to the city. White Center has a nice downtown area that families love, too. Don’t forget to look at the suburbs, too, for real estate investment opportunities.
Fremont is a quirky neighborhood that might be a little too counterculture for some investors, but it still provides a great opportunity for return. That’s because the neighborhood has great schools, a public library and other amenities that make it an attractive place to live. In addition, it’s home to companies such as Google, Adobe and Getty Images.