According to the latest figures released by the Northwest Multiple Listing Service (NWMLS) in February 2016, King County posted a new record high for median home prices at $515,600– increasing by nearly 19 percent over the prior year. And condo prices in the area increased even more countywide, rising 26 percent with a median price of $343,975. That means that Washington’s most populous county has officially recovered from its prior 2007 peak pricing when the Great Recession corrected home prices. Yet in some close-in markets near jobs and lifestyle attractions, home prices are rising even faster. In the 2015 Year in Review Report released by Realogics Sotheby’s International Realty(RSIR), which compared the full year with the prior year, it was noted that West Bellevue posted 17.6 percent gains at $1.08M last year and Downtown Seattle surpassed all with increases of more than 30 percent year-over-year at$561,000.
“If ranked as a micro market, Downtown Seattle actually eclipsed the top 100 global cities for median home price appreciation in 2015,” said Dean Jones, President and CEO of RSIR. “While we haven’t officially made the list among global cities yet, we’re certainly on our way.”
Jones points to the recent Knight Frank Wealth Report, which recognized Vancouver, BC as the top global city posting a meteoric 24.5% median home price increase – other leading cities with double-digit appreciation included Sydney, Shanghai, Melbourne, San Francisco and Auckland. Among the 34 cities where real estate prices fell in 2015, the majority (22) were in Europe, highlighting the economic woes of the region.
“A clear trend among these top Pacific Rim cities is the rising demand from foreign nationals, most commonly from China and throughout Asia,” adds Jones. “When prices grow this quickly, it’s not just expanding jobs and incomes – housing has become a safety deposit box for a flight of international capital.”
In January, the Seattle Times released an article entitled “High-end Home Sales Booming as Tech Execs, Foreign Buyers Shell Out Millions” in which RSIR provided data suggesting that Chinese investment was among the largest stimulants of luxury home sales increases in 2015. It’s a theme that Jones and others believe will continue to propagate in 2016.
But it’s not just foreign buyers driving up the market locally – there is population growth as a lot of inbound residents are coming into King County too. According to the yearend report issued by the Washington State Department of Licensing, King County welcomed 71,383 new drivers to the region and 14,792 of them came from California – the largest producer of new residents to the region followed by Texas (4,227) and Oregon (3,489).
“Our economy offers a tremendous bounty of jobs and despite the rising housing prices, we are still relatively affordable and we have no state income taxes,” adds Jones. “Most new residents will rent for a few years until they get settled in the market but we believe a rising percentage of them will look to buy, which is why we believe developers are increasingly exploring condominium development again.”
Interestingly, in 2015 more new residents arrived in King County from key Asian countries (3,585) than from the neighboring state of Oregon. The Asian countries were India (1,592), Korea (731), China (692), Taiwan (418) and Japan (152).