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Beijing watched the American bubble pop in 2007-2008. But the stakes are considerably higher for the Communist Party bigs, who essentially promise citizens prosperity if they go along with a one party authoritarian state. … In China, the issues are considerably more complex. And the leadership’s fear of allowing market forces to operate may be as dangerous as being too late to implement effective curbs. As the world’s second largest economy, a meltdown there would further dampen world trade. As for us, at its worst, a Chinese asset price collapse might pull the demand out of price rises here. But sorting out winners and losers won’t be quick or easy.
An increasing number of landlords and sellers are cutting prices, according to the study from real estate website Trulia.
San Francisco saw the highest percentage increase of for sale listings with price reductions in the country this year. The number of price cuts on properties nudged up 3 percentage points to 8 percent this year from 5 percent last year. By comparison, the national average was a .5 percent increase.
Today, Amazon opened the second of three 36-story towers at the heart of the e-commerce giant’s Denny Triangle headquarters.
Day One – formerly known as Tower II — stands opposite the Doppler building and towers over the globular biosphere building. Construction crews recently broke ground on Tower III, just west of
Doppler, Day One and the biosphere on a lot formerly occupied by a Prime Now fulfillment center.
The Seattle Times reports that of the homes sold this year, almost 12 percent have sold for more than $1 million. That is double the average rate over the past 10 years, according to the Times.
And the estates selling for more than $1 million aren’t all the traditional waterfront dream homes. The Times reports that places in Ballard, Capitol Hill, First Hill, Fremont, and West Seattle are experiencing the price spikes.
Matthew Gardner, Windermere Real Estate’s chief economist, told KIRO Radio that a large reason for this uptick in home prices has to do with transportation.
“Essentially, there’s a value to our time,” he said. “We will pay more to live closer to where we have to work. So that tells me very clearly we need to really start addressing transit and transit issues.”
That’s a valid argument, as we found out back in March that — for example — Seattle has the second worst evening commute in the country. Data shows that traffic for rush-hour evening commutes was only second to Los Angeles. And Seattle tied for fourth when it comes to overall congestion.
“Home sales, prices still climbing in Puget Sound area,” Kent Reporter, November 4, 2016
Home sales around Western Washington out-gained new listings again in October, fueling competition for scarce inventory and pushing prices higher.
Some seasonal slowdown is still expected – and the Nov. 8 elections may be in play as well, according to brokers at Northwest Multiple Listing Service who commented on last month’s activity.
MLS members reported 9,950 pending sales during October, but they added only 7,591 new listings, the lowest number since January, according to a MLS media release. A year-over-year comparison of pending sales shows there were 633 more mutually accepted offers last month than twelve months ago for a gain of 6.8 percent.
Seattle was recently cited as the top U.S. city for construction cranes, with twice as many in action as New York or San Francisco. Viscerally, it feels like a building boom that could outstrip demand.
The problem is that, by and large, the city isn’t building housing. Of the 16 new high-rise towers being built in Seattle, just two of them are condominiums. Between Seattle’s three new condo buildings, the city is adding about 1,000 housing units. New apartment buildings are only bringing online around 2,000 new units in the short term. Meanwhile, King County issued 71,000 new driver’s licenses to people from out of state in 2015. Most of these people will work in the metropolitan core. The numbers aren’t adding up.
Seattle’s rate of housing construction continues to fall behind the region’s population growth. The demand for housing comes from a changing local environment. An ever increasing population of technology, healthcare, science and other workers are relocating to the area for its booming employment market.
In the current environment, with robust job growth and a nationwide spotlight, Seattle is experiencing rapid price appreciation. Double-digit gains have become the norm, squeezing the ability of the average resident to live in
the core. This creates great stress on the transportation system as residents move further out and commute back in to the city.
Seattle area home prices are now rising at their swiftest pace in 2½ years, and the region is closing in on Portland for the title of fastest-growing home prices in the country.
The typical single family house across Greater Seattle cost 11.4 percent more in August than it did a year ago, according to the new Case Shiller home price index released Tuesday. That’s the eighth straight month of double-digit growth, and the biggest annual increase since March 2014. Home prices grew at a similar rate in 1998 and soared even faster during the lead-up to the mortgage bubble in 2005 and 2006.
Portland again led the country, as it has all year, with home prices up 11.7 percent compared to a year ago.
Source: Case Shiller home price index
Home sale gains tracked upward across the country during the third quarter of 2016, with major west coast cities seeing the biggest return on investment for homeowners.
Homes sold in Seattle and Portland showed 51 percent gains over the original purchase price, marking gains from the appreciation from earlier quarters, according to numbers from RealtyTrac.
“Seattle clearly stands out as a housing market that continues to outperform the vast majority of markets in the U.S. relative to price appreciation,” Matthew Gardner, chief economist at Windermere Real Estate, told RealtyTrac.
Among King, Kitsap, Pierce and Snohomish counties, NWMLS noted Friday that “only Kitsap had an uptick in new listings compared with a year ago, but that county’s robust pending sales (up 20.7 percent) helped deplete its total inventory versus 12 months ago (down about 7 percent).”
King County’s results continue to be the outlier in the state. The Seattle Times reported Friday that nearly 12 percent of all single family homes sold in the county this year went for more than $1 million. Less than 5 percent of homes in King County go for less than $250,000.
King County’s rental market also can be daunting. This week, apartment rental website Zumper said in its November report that Seattle is now the ninth most expensive city in its U.S. rent index, outpacing Miami. Zumper’s list had one bedroom apartments in Seattle going for $1,820. San Francisco was at the top of the list, with its one bedroom rentals at $3,380.
Since Vancouver, B.C. passed a tax on real estate sold to foreign buyers, many (including us) have been speculating on the impact, if any, it will have on Seattle’s already busy market.
Zillow’s Chief Economist, Svenja Gudell, listened, thought, and wrote an analysis of the situation.
“it seems unlikely that Seattle will see a large increase of foreign buyers closed out of the Vancouver market.“
Just because they’re having trouble up there, doesn’t mean they’ll suddenly shift down here.
While the two cities may be close and similar, we are in different countries, and they may prefer to return to buying in Vancouver after the tax implications are better understood. Years of acquisition in Vancouver mean at least somewhat of an established culture, familiarity, and habits. And, the Canadian dollar is cheaper than the US dollar.
The tax’s dramatic impact may have more to do with reactions before and after the announcement.
“Knowing the looming deadline, it is likely many foreign buyers pushed their timelines forward to make sure they closed their purchases before being subjected to the tax.“
It is possible that, even if there is an impact, it will be in the market for expensive homes, places that are appealing to people with significant wealth. The effect may be contained.
Opinions and analyses are necessary. Eventually, data will reveal the reality. That’s true for Vancouver. It’s true for Seattle.
After a long and painful slide following the real estate collapse in 2008, Seattle’s property market is enjoying one of the sharpest rises anywhere in the United States. Buoyed by a rapidly expanding economy that has brought tens of thousands of high-paying jobs to the city, real estate values have nearly doubled since 2009, according to the online real estate database Zillow.
Yet while technology billionaires gobble up estates from Puget Sound to Lake Washington, Jim Conlan, a real estate broker with Century 21 North Homes Realty in Seattle, says the real catalyst for the dramatic upswing can be found in China. “To be honest, Chinese buyers have been flooding this market the past few years,” says Conlan, who has been selling homes in Seattle for more than 30 years. “Some of them buy homes sight unseen, while others travel here for a kind of real estate tourism and buy real estate after only one viewing.”
Seattle is not alone. For the fourth year in a row, buyers from China ranked first among foreign nationals purchasing property in the United States, according to a survey by the National Association of Realtors (NAR). U.S. home sales to Chinese nationals totaled $27.3 billion — exceeding the total dollar sales figure of the next four countries in the rankings combined, the survey showed.
Chinese investment in U.S. real estate could hit $50 billion by 2025, according to a report by the Rosen Consulting Group and the Asia Society.
Interested in learning more about new real estate trends, here are a few articles we recommend:
“Comment la Chine achète le Canada”, MSN Finances, August 30, 2016
Matthew Moore, “Is the EB-5 investment visa really dead?”, Inman, August 12, 2016
“Foreign buyers driving Calgary’s luxury real estate market” The Globe and Mail, June 10, 2016
‘Chinese still buying property like there’s no tomorrow’, CNBC, January 18, 2016