Why Invest in Washington Real Estate?
When most people think about the state of Washington, they think of Seattle’s iconic Space Needle, vibrant music scenes and amazing coffee. Be it the world-class vineyards located above the Columbia River or the still-active Mount Rainier volcano, Washington truly has it all.
But, outside the lush landscapes and trendy city centers that fuel an almost $21 billion tourism industry, the Evergreen State offers much more than meets the eye. It’s the 10th richest state, and home to Amazon’s main headquarters, which employs over half a million people statewide. Couple this with other household names like Starbucks, Costco and Boeing, and you have a vibrant mix of old and new economies that currently lead the nation in growth. And it’s this growth that is fueling the real estate market with double-digit appreciation in many areas.
Investment Considerations for Washington Real Estate
There are a number of factors to consider, including:
- An expanding economy, with wages that are some of the highest in the country - Washington’s economy grew by 3.7% in 2016, which is 2.5 times the national rate of growth during that same time period. The state currently leads the nation in gross domestic growth, concentration of STEM workers and percentage of high tech jobs. And while investment per capita is low, Washington is able to attract a skilled workforce at an almost unprecedented rate since housing costs in Silicon Valley are so much higher. Highly skilled talent, high college graduate retention rates and higher-than-average wages has created a competitive real estate market that doesn’t show any signs of slowing down.
- Inventory is low and demand is high – Washington is seeing a surge in population growth, which is limiting inventory and increasing demand. There’s presently less than a 2-month supply of homes available in many popular areas of the state, including Seattle, which is sending both asking prices and rental rates higher.
- Taxes are high - Washington is one of seven states that does not have a personal state income tax or corporate income tax. This benefit is offset by sky-high tax rates, however. The states base sales tax sits at 6.5%, but cities and counties can tack additional taxes on top. In most areas, this equates to nearly 8%, but in others, it can go higher than 10%.
What are the Best Markets to Invest in Washington
West Richland, which is located in the Columbia Valley, ranked second in a “Best Cities for Young Families in Washington” survey due to its low crime rates and relatively affordable cost of living. More important, however, is that the area is seeing above average population growth and steady appreciation. Sammamish, a suburb of Seattle, was ranked as the number one place to raise a family in Washington because of its school systems and proximity to major employers, including Microsoft. While prices are still steep here, they haven’t kept pace with the appreciation that’s taken place in Seattle proper.
HomeUnion® is the leader in residential real estate investment. With the use of big data and machine learning, we analyze information on millions of single family homes in Washington; and across the United States and calculate home values RENTestimate for every property in Washington. If you’re looking for the best investment properties across the country, visit our comprehensive investment site.