Almost since the start of the pandemic, homeowners have been spending more time enjoying their low-financed houses and condos. They have also been spending oodles of dollars to shape their residences to meet new living needs – modern and spacious, when possible – as households live in their homes for longer.
Owners are investing about $475B (yes, billion!) annually in home improvements across the U.S., an increase of about 14% year-on-year, according to Harvard research for Q1. Improvements include remodels, replacements and additions to homes.
The $180B kitchen and bath market is leading the home-improvement charge and, despite economic headwinds for many households, industry experts see no end in this modernization movement. Kitchen and bath professionals are reporting 3.9-month backlogs of contract work, as of Q4 (latest data available), which is down from the peak of 4.8 months in Q2 of 2022, according to a survey conducted by John Burns Research & Consulting.
In many cases, the lag time to complete projects is no longer from dreaded supply-chain issues. Instead, industry pros are pointing to a lack of skilled tradespeople required to install kitchens and baths as the primary cause for delays.
Compounding the demand is a consumer public determined to stay put for several more years rather than dive into a real estate market clouded by higher interest rates. Information from the National Mortgage Database shows 83% of all mortgage holders enjoy an interest rate below 5% when today’s average rate is about 6.5%.
The so-called rate-lock effect is prompting many homeowners to remodel over a move. The average tenure for homeownership is now at a historic high of 10.7 years, according to recent data, when it was only about five years just before the housing market crash of 2007.
U.S. Census data suggest that more than 2M additional homes will reach their “prime remodel” years through 2027 – a time when homes tend to undergo their first major kitchen and bath renovations. According to John Burns research, that translates into roughly 1.3M such renovations to these homes (between 20 and 39 years old), with about 200,000 of those projects running north of $25K each.
Forget investing in a new home, you might want to look at kitchen and bath suppliers and remodelers as wise investments!
THIS LAND IS YOUR LAND
Local governments across our state (including North Seattle looking south, pictured) are undergoing a massive review of their land-use regulations in something called a Comprehensive Plan. Across portions of King County, now is the time to provide input into how the land – your land – should be managed and maintained for the next 10-year cycle.
It’s a consequential time for our region, working to improve upon our current shortage of housing, particularly the dearth of affordable homes. Locally, the process requires cooperation among the Metropolitan King County Council, Seattle City Council and Sound Cities Association (comprised of the county’s 38 cities outside of Seattle).
King County Council is already acting, reviewing a scope of work that will help inform decisions on environmental impacts across public transit, sewers, parks & trails and other aspects of living sustainably in our region. (Seattle, along with county officials in Snohomish and Pierce, have critical decisions and votes soon, too.)
The King council covers all sections of the county outside established cities and towns. Its nine members are aiming to address social equity, affordable housing and climate change in our region. Some highlights of their objectives include:
- Strategies to mitigate cultural, economic, and residential displacement in unincorporated area communities;
- Proposals to allow “middle housing” types and “inclusionary housing” in unincorporated area communities;
- Plans to manage and reduce wildfire risk and extreme heat made worse by climate change;
- And, strategies to phase out fossil-fuel usage in buildings and improve transportation equity.
The council is seeking feedback from residents before the mandatory deadline to finalize its comprehensive plan hits on June 30, 2024, with changes enacted at the end of next year. By that point, King and the state’s 38 other counties must report anticipated growth figures for population and employment and establish an action plan to address their needs for the next two decades.
Additional opportunities for public review of and feedback on the 2024 update will occur as part of the King County Council review of the proposals throughout next year.
OLYMPIA WRAP-UP
What a session for state lawmakers! A record 494 bills passed the Legislature and are now with Gov. Inslee for his signature, with many already signed and preparing to go into effect in July. The remaining 1823 bills that did not pass this session will automatically be reintroduced next year.
As reported in last month’s newsletter, 23 pieces of housing-related legislation passed the House and Senate. They include greater transparency around real estate brokerage services, initiatives to boost housing supply and a greater effort to allocate more affordable homes (for rent and sale). Lawmakers delivered more than $1B in housing initiatives, including $400M in the Housing Trust Fund that will build approximately 3,000 new permanently affordable homes.
Most consequential was a landmark bill to allow multifamily housing in nearly every part of the state. Signed by the governor last week, the law is intended to boost the number of duplexes and fourplexes in neighborhoods now reserved for single-family homes
Legislation related to transit-oriented development did not pass. The bill was aimed to help with traffic congestion and pollution by building denser housing near major transit locations. The proposal ran into issues when controversial amendments were introduced in committee.
The legislature also decided not to move forward with the govenor’s $4B housing proposal. The state estimates it needs 1M additional homes within the next 20 years to make up for decades of underbuilding.
The measures – small and large – passed in this session will go a long way to addressing the state’s acute shortage of homes and affordability crisis.
“Washingtonians won this session,” said Dan Bertolet, Director of the Housing and Urbanism program for Sightline Institute, a Pacific Northwest regional think tank. “Whether it was cutting red tape and construction costs or ensuring our cities allow more affordable options near transit and jobs, these bills, working together, mean more homes, at more affordable prices, in communities all across our state.”
BY THE NUMBERS
>> More than 2.3M new Hispanic homeowner households have joined the market since 2014, bringing the current number of Hispanic-owned homes in the U.S. to 9.2M for a homeownership rate of 48.6%. The National Association of Hispanic Real Estate Professionals issued its annual report in March.
>> Seattle is ranked No. 2 in the U.S. for healthiest cities, according to WalletHub. The personal finance site reviewed 43 key indicators – from health care/longevity, diet, fitness and green space – to formulate its list. San Francisco came in at No. 1. Portland, Ore., finished sixth.
>> Thanks to this region’s high cost of living and factoring in taxes, Seattle area households need to earn roughly $213K a year to feel like they are in the $100K Club. That’s according to a report from financial-tech company SmartAsset. The gross income requirement ranks Seattle metro 10th in the report. Honolulu tops the list, where residents need an annual salary of $312,400 to feel like a six-figure earner; the state capital’s cost-of-living index is 86% above the national average.
>> Three Washington metros were among the cities with the lowest ratio of all-cash home sales in Q1, according to a report released by ATTOM Data Solutions. Seattle was No. 2 for the lowest percentage of cash sales at 22.5%, just below Spokane (22.6%) and Kennewick (22.9%). Vallejo, Calif., had the smallest share of cash sales in the nation (21.4%).
>> Seattle metro enjoyed one of the highest U.S. home-sale profit margins in Q1, according to the same report from ATTOM. Our market had a raw profit of $236,000 on median-priced sales. That ranked fifth in the nation behind the California cities of San Jose ($475,000), San Francisco ($316,000) and San Diego ($242,750), with Naples, Fla. ($255,750), squeezing in at third.
>> One in every five Americans rents a storage unit at an average cost of $127/month, according to data published by StorageCafe. The primary reason for their use (40%) is “not enough space at home.”
MAY HOUSING UPDATE
How’s the market, you ask? The typical seasonal spring in its step has been replaced by a slow shuffle as the Seattle/King County residential market tries to find its rhythm in a challenging economic environment.
Falling new inventory is constraining transaction volumes while also supporting higher home prices. It’s a dynamic not often seen in our area and it – along with stubbornly high mortgage interest rates – has generated a rollercoaster ride of data that would make Six Flags jealous.
The number of new April listings for all home types in King County (2638) was 10% lower than the previous month, at a time of year when spring real estate activity should be taking off. Except for the pandemic year of 2020, last month was the slowest April since at least 2008 when easy access to Northwest Multiple Listing Service data became available. The figure was 37% lower than a year ago and, for context, the five-year April average of new listings just before the pandemic began was 4021.
Read a detailed assessment of our housing market in my most recent blog post: Shrinking Number of New Listings Slows Seattle/King County Housing Activity
CONDO NEWS
Downtown and Belltown are filled with energy not seen since, well, before the start of the pandemic in March 2020, when businesses started to shut down after a long successful run. In a huge move toward a newer normal, Amazon this month welcomed back workers to its offices across Seattle – at least three days a week.
The presence of more than 50K “Amazonians” will be a massive boost to businesses from retailers to restaurants.
And residential real estate? That question may take several months to answer but, if we can measure hope and optimism then we can expect an uptick – if not a flurry – of activity in market-rate housing from Queen Anne hill to Capitol Hill.
A lot is riding on this sudden influx of people to our city’s streets. Downtown offices have been near the bottom of the charts among U.S. cities for office occupancy at 45% of pre-pandemic levels as of March, according to Downtown Seattle Association. A separate study that uses smartphone data shows Seattle ranks 51st out of 63 U.S. and Canadian metros for rebounding to pre-pandemic levels of people in downtown. (Portland, St. Louis and San Francisco were at the bottom of the list.)
Homelessness, crime and fewer retailers prompted people to avoid the business district for years. For the first time since August 2021, the percentage of Seattle voters saying they are visiting downtown the same or more often than they did pre-pandemic has increased. However, two-thirds still say they are visiting less often and those who visited most frequently pre-pandemic are the most likely to say they are visiting less.
The survey of 700 Seattle registered voters took place in early spring before Amazon workers returned.
What might we see in local real estate? There is a forecast for continued growth in the tech sector, despite many early year layoffs, with 13.4K new positions in Washington expected this year. As commute times expand, successful tech workers who earn an average salary of $130K in our state, may want to live closer to the office and consider purchasing a condo – a segment of the housing market that has lagged behind single-family and townhome sales.
There are many home options available to prospective buyers – including new construction offerings in buildings that opened during the pandemic. They include Nexus, The Emerald, KODA and Spire. And, opening this year, Graystone.
It’s now up to consumers to weigh their options and determine when the timing for buying is right for them.
We are watching developments at Escala, the elegant luxury condo in downtown Seattle. There are currently 11 residences on the market in the 267-unit, 4th Avenue high-rise. That appears to be a somewhat higher number for this high-end building. Five additional residences have traded hands this year and one more is under contract for sale.
Why the desire to leave? It may have something to do with a judge’s ruling in December that removed final obstacles for a high-rise project to begin only a few feet away. In addition to the noise of construction for a few years, the final product – a proposed 48-story, 430-plus-unit apartment/hotel – will likely block natural light to the east-side residents at Escala and reduce the value of their homes.
One outstanding issue: Who pays legal fees for the defendants. A ruling on whether the bill will hit the HOA has yet to be announced.
LUXURY LIVING
Newport Shores is like a small version of Ft. Lauderdale and its homes along canals. The setting is peaceful and comes with water views. Few homes in this exclusive section of Bellevue come on the market, so when this 4-bedroom, 3.75-bathroom, 5498 sq. ft., 1-story (with basement) was listed in late April, I knew it was worth spotlighting here. Highlights include the dramatic living room, stone fireplace and round kitchen countertop eating area. There’s also wonderful outdoor space with 105 ft of waterfront. Absolutely stunning! List price: $10.5M ($1910/sq. ft.).
Looking for something a little less pricey but still on the water? Then check out this 6-bed, 4.25-bath, 6290 sq. ft., 2-story residence in Weber Point on the northeast side of Lake Sammamish. The use of wood throughout the home is both tasteful and unique (laid within a slate-tile floor!), and a 2-story great room makes a bold statement. The outdoor space is ultra Northwest, including a sport court, covered living area, kitchen with bluestone patio, spa tub with waterfall and shower, wood-burning firepit and 75 ft. of shoreline. I love the listing video! The owners are selling the custom-made home after a quarter-century and reportedly retiring to Montana. Property taxes are steep at $60K a year. (That’s Sammamish!) List: $8M ($1272/sq. ft.)
Readers asked if I would spotlight luxury homes outside the Seattle/Eastside area. Well, here’s a good one: a 4-bed, 2.75-bath, 3259 sq. ft., tri-level home in the Marine Hills section of Federal Way. Split levels are not my favorite (or my clients’) because of the multi-stair layout but this one stood out for its fantastic views of Poverty Bay to the west. The outdoor spa pool with Sound views will likely be a favorite this summer. List: $1.325M ($407/sq. ft.)
The founders of Seattle’s most popular bookstore – Elliott Bay Book Co. – are selling their Mt. Baker home after 45 years. Walt and Maggie Carr, who sold the bookstore 24 years ago before the landmark shop moved to Capitol Hill, are now living with family in their retirement years on Vashon Island, according to the Puget Sound Business Journal (paywall). The 5-bed, 3.5-bath, 4350 sq. ft., 3-story Colonial (with basement) never looked better. Built in 1929, the residence offers water and mountain views and the home now enjoys plumbing and electrical updates, refinished hardwood floors and fresh coats of paint. The third floor was added in the 1980s. List: $3.175M ($778/sq. ft.), a $210K price drop from earlier this month.
A century ago, the rich and famous of Seattle lived closer to downtown. This 5-bed, 4-bath, 6500 sq. ft., 1915-built, Georgian-style, Capitol Hill home speaks to that time and the bold and beautiful homes that were commonplace. The home was constructed for olive-oil importer John Vittucci. Ironically, the current owner reportedly was raised on an Italian farm that produced olive oil and he and his family are now returning. Rich oak beams are featured in this majestic mansion along with period-appropriate light fixtures. Yet, the amenities are modern from kitchen to bath, plumbing and electrical, with a reported $2M in updates to the property since it was purchased in 2009. Check out the listing’s lookbook and cinematic video flythrough. Wow! The home is hidden with a smart layout of trees, bushes and plants on a shy, quarter-acre of landscaped grounds. The attention to detail and craftsmanship is astounding. List: $5.25M ($808/sq. ft.)
What else is happening in and around your Seattle?
Free Classical Concert, May 18
Students join the Seattle Symphony to produce a memorable evening – the Merriman-Ross Family Young Composers Workshop Concert. Support the arts through a donation at this free community event – Benaroya Hall (200 University St., Seattle) 7:30pm
Big Trucks, May 20
When I was a young boy, there was nothing more fun than playing with my Tonka trucks and Matchbox cars. Well, for kids of today they can enjoy the real thing! Rig-a-Palooza will feature a fire engine, aid car, state patrol vehicle, backhoe and more – plus food trucks! The free event takes place at Sammamish Commons Plaza (801 228th Ave. SE, Sammamish). 11am-2pm
University Street Fair, May 20-21
The first big event I ever attended in Seattle was right outside my apartment – the University District Street Fair, with outstanding arts & crafts booths all along University Way NE and food trucks throughout the immediate UDistrict area. There is live music, dance and comedy, as well as a beer garden, farmers market (9am-2pm, Saturday only) and kids’ zone. Free to attend. Saturday, 11am-7pm; Sunday, 11am-6pm
Pro Basketball Returns, starting May 20
The winningest pro basketball team in Seattle history returns to the hardwood for a new – and dramatically different – season beginning May 20. The Seattle Storm of the WNBA open their home campaign at Climate Pledge Arena (334 1st Ave. N.) against former UW star Kelsey Plum and the Las Vegas Aces. Former Storm center Breanna Stewart makes her Seattle return on May 30 with the New York Liberty, and former Seattle superstar Sue Bird – the Storm’s all-time leading scorer – will have her No. 10 jersey retired in a ceremony on June 11. Tickets
Folklife, May 26-29
A very Seattle celebration is preparing to hit our main cultural hot spot – Seattle Center (305 Harrison St.). Celebrate traditional arts by attending some of the hundreds of dance and musical performances, workshops, and panels from around the world held at Northwest Folklife Festival. This year’s theme is “lagom” – not too much, not too little, just right! Donations are welcome in lieu of entry fee.
Memorial Day Festivities, May 29
The unofficial start of summer – Memorial Day weekend – includes a series of activities and events to mark this important holiday to honor those who served and lost their lives to protect our freedoms: Museum of Flight in Seattle, Tahoma National Cemetery in Auburn and Evergreen Washelli Cemetery in Seattle (see my video blog post from 2022). Various times.
Pride Month, June
It’s time for all our LGBTQ+ neighbors and friends to join in celebration of Pride Month. (June is here, already? Well, clutch my pearls!) My favorite part of this wonderful time is Pride in the Park, which offers a range of music, speakers, food, a beer garden and craft vendors for all ages – on June 3 at Volunteer Park (1247 15th Ave. E; grounds map). 12-7pm. The annual Pride Parade – the largest parade in the state – is on June 25 and runs along 4th Avenue from downtown to Seattle Center. 11am-till
Eastside Concert Series, June 4-Sept. 22
It’s that time of year again – outdoor concerts! – and the Eastside has you covered. Marymoor Live presents a variety of fantastic music in a green setting. Bring $10 cash for parking and a blanket or chairs to Marymoor Park (6046 West Lake Sammamish Pkwy NE, Redmond). UB40, Young the Giant, and Rick Springfield are among this year’s headliners. And, Chateau Ste. Michelle showcases its Summer Concerts with big-name acts from James Taylor and Ringo Starr to Charlie Puth and Sheryl Crow. Reserved seats or hillside seating are available in Woodinville (14111 NE 145th St.).
International Dance Festival, June 10-18
Seattle International Dance Festival is an explosion of dance and the arts at Broadway Performance Hall and the Erickson Theater on Capitol Hill. Performers from South Korea, France, Switzerland, India and across the U.S. are scheduled to appear. Tickets
Events are subject to change. Please check with venues to confirm times and health-safety recommendations.
In case you missed it….
One of the joys of working in this business is to get a glimpse inside many outstanding residential buildings and then share my findings – both with visuals and text – for your benefit. My video featurettes of condo buildings attract many hundreds of views on my YouTube channel (and I thank you!).
Those videos also appear within the blog posts that shine a bright spotlight on the buildings, amenities and distinct characteristics of the community. My journalism background helps dig up interesting nuggets about the history of the street or neighborhood, or it may provide surprising data points when comparing one condo building with others.
My most recent foray into the condo world was a trip to Seattle’s stadium district to have a look at Gridiron. The name may give you a clue as to its exact location. Here is my detailed report for you to enjoy.
My Living the Dream blog also recently featured two environment-related articles that spotlight the impact climate change and Mother Nature may have on our homes and how flooding is a rising concern.
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