Fueled by the same thing that has run our area for the last 20 year, the tech industry is causing Seattle to be one of the hottest real estate markets in the country. Due to the tech boom and numerous technology-based businesses moving headquarters or satellite offices to the Puget Sound area, home prices in the Seattle region rose 11% between September 2015 and September 2016. This puts us past the Portland real estate market which saw only a 10.9% year-over-year increase.
Not only are the technology industries increasing in this area but transplants from other major metropolitan cities are flocking to the Puget Sound area for the jobs involved and the low cost of housing compared to where there are coming from. In a recent article by GeekWire, there are more than 80 engineering offices in the Seattle area by large tech giants such as Facebook, eBay, Amazon, and Salesforce just to name a few. Amazon alone employs more than 25,000 people in the Seattle area, which of course adds to the boom. Combine this with the demand for homes and we quickly outpace our closest competition. In addition, foreign buyers, particularly from China, also contribute to Seattle’s housing boom.
The drawback is that many long-term Seattle residents are feeling squeezed out of the area I the high cost of living and rising home prices. Even though we are still behind the San Francisco bay area in median home prices and list prices, we’re catching up very quickly to other West Coast gateway markets.
Two other cities with robust tech scenes, Portland and Denver, experience the second and third highest year-over-year gain among the top 20 US cities according to an S&P/Case-Shiller report.
September 2016 was a strong month across the nation with an annual national gain of 5.5%. This surpassed the previous peak all the way back from July 2006 at the height of the housing boom. However, this has discouraged some House hunters as King County’s median home value is about $518,000 whereas in the Seattle proper, values start at about $611,000. One of the major reasons for this is simply a lack of inventory. There is a shortage of homes to choose from, thereby causing prices to increase rapidly as the demand grows as well.