Long summer days, active waterways, and the draw to make the most of both—especially after our notorious winter months—sets up the story for waterfront living. For some, the water’s edge pacifies the precipitation that falls from the sky. Appreciation for such natural beauty is demonstrated by a supply and demand imbalance, which is omnipresent along the shorelines.
Case in point, during the spring sales season of March through May, average prices for single-family homes on the waterfront in King County (the most active submarket) are averaging about 25% appreciation annually, for the past two years. In February 2018, RSIR sold a waterfront property in Medina for $27 million, which was then the high watermark in the NWMLS. Just two years later, RSIR was party to another off-market sale at $60 million on Hunts Point, then again, the record sale for the year. Today, asking prices of $20 million and $30 million are finding buyers, and some are testing new limits upwards of $85 million and may well get it. While these values may sound extraordinary, there’s more freeboard in the market for even greater prices when considering the relative value of real estate in the central Puget Sound region, compared to other West Coast gateway cities. Our median incomes are typically higher, our median home prices are lower, and Washington State doesn’t have an income tax—so no wonder residency (and capital) flows here. In fact, many inbound residents from California (one of the highest combined tax states), realize their move equates to an instant pay raise and helps finance other waterfront accessories, like a yacht, to augment the dock.
Of course, there are other housing formats, like condominiums, which bring waterfront living within closer reach. And there are exurban locales where residing along lakes, rivers, or even the ocean, is still relatively attainable, at least for now.
For those that want to dip their toe into the water, I have some refreshing news. Year-to-date 2022, inventory levels for waterfront properties in King County are actually 43% higher than they were a year ago, but that’s still less than half of the supply from 2019. Rising prices, spiking interest rates, and stock market volatility have quelled some buyers, with pending sales trending about 22% fewer than the same year-to-date in 2021. Yet, the summer season has just begun, and all indications suggest the tides are still rising.
Waterfront property may just be the Pacific Northwest’s most liquid asset that you can take stock in (and live in). It is, in fact, a lifestyle investment.