Page 1

2016/2017 MARKET REPORT YEAR END REVIEW & TRENDS TO WATCH

In this review of 2016 market activity in the Puget Sound, we explore the markets in seven key counties of Western Washington State: King, Pierce, Snohomish, Kitsap, Skagit, Jefferson and Island counties.


TABLE OF CONTENTS

COV E R P H OTO ( S ) : 4 6 69 Sa ra to ga Rd , L a n g l ey, Wa s h i n g to n | Pr i ce d a t $ 3, 5 0 0,0 0 0 P H OTO B Y: J o r d a n K l e i n P H OTO A B OV E : We s t S e a t t l e | S O L D a t $ 1 ,4 0 2 , 5 0 0 P H OTO B Y: C o r y H o l l a n d


04............................. GLOBAL LEADERS IN LOCAL REAL ESTATE 05.................................................. THE BOOM'S LAST BASTION 06.........................................................................EMPLOYMENT 07.. ................. SOUND TRANSIT EN ROUTE, BUT RUNNING LATE 09............................................... A SURGE IN FOREIGN BUYERS 11......................... BARRIERS TO TAXES IN WASHINGTON STATE 12..............................................WEIGHING VOTERS' CONCERNS 13........... RISING INTEREST RATES PROVIDE INCENTIVE TO BUY 14.............................................. IMPACT OF A NEW PRESIDENCY 15.................................................................OUTLOOK FOR 2017 16...................................... MEDIAN SELLING PRICE BY COUNTY 17.....................................MEDIAN SELLING PRICE BY ZIP CODE 18........................................... COUNTIES IN THE PUGET SOUND 27. . ........................ COMMUNITIES AROUND THE PUGET SOUND 53.. ................................................................. OUR PHILOSOPHY 54.. .................................................................................... INDEX 55.. .........................................................................REFERENCES


4 / / GLOBAL LEADERS IN LO CAL REAL ESTATE //

GLO BAL L E AD E RS I N LO CA L R E A L ESTAT E

T

he past year was marked by many pivotal milestones for both Realogics Sotheby’s International Realty (RSIR) and the local housing market that we serve. The Seattle/Bellevue metro area finished 2016 with the fastestgrowing median home prices in the US, according to S&P/Case-Shiller Home Price Index. RSIR exceeded $1.1 billion in local sales volumes and was recognized by Trendgraphix research as being the most productive listing firm per broker among the top ten largest brands in the Northwest Multiple Listing Service. We welcomed industry leaders to our expanding executive team, including Jennifer Johnsen Cameron as Vice President of Brand Development, Joe Galindo as Vice President of Operations and Diane Nelson as Controller. We opened new flagship brand operations on Bainbridge Island and in Madison Park. Sotheby's International Realty was also recognized by Lifestory Research 2017 the “Most Trusted Residential Real Estate Brokerage” in the United States. Our acclaimed Research Editor and Publisher, William Hillis has assembled a year-over-year performance review of 25 markets and offered thoughts on where we are headed in 2017. While real estate microclimates will always change, one thing remains the same—we are here to support your real estate goals, whether your next address is around the corner or around the world.

Dean Jones

President & CEO Realogics Sotheby's International Realty


// THE BO OM'S L AST BASTION // 5

T HE BO O M 'S LAST BAST I O N

J

ob growth, congestion, immigration policy, taxation and interest rates factor into Seattle’s holdout housing market.

In 2016, growth in Seattle home prices, on a percentage basis, continued to lead the nation amidst slackening growth in competing cities. The S&P CoreLogic Case Shiller report highlights described the year’s leaders as follows: "Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities over the 11 months leading up to December. Seattle led the way with a 10.8% year-over-year price increase in December, followed by Portland with 10.0%, and Denver with an 8.9% increase. Twelve cities reported greater price increases in the year ending December 2016 versus the year ending November 20161." Annual growth lagged in Seattle’s Pacific Coast gateway competitors San Francisco (5.7 percent) and Los Angeles (5.4 percent) while economic and lifestyle competitors such as Boston (6.3 percent) also fell behind. A coalescence of seemingly unrelated factors have kept Seattle’s market from succumbing to the malaise that appeared to be setting in across the country at year’s end.

SEATTLE LED THE WAY WITH A 10.8% YEAROVER-YEAR PRICE INCREASE, FOLLOWED BY PORTLAND WITH 10.0%, AND DENVER WITH AN 8.9% INCREASE Downtown Seattle $2,399,000 SOLD

R ealo g ics S otheby's Inter national Realty | rsir. com


6 / / EMPLOYMENT //

EM P LOY M ENT

AREA JOB GROWTH CONTINUES TO STOKE EBULLIENT HOUSING DEMAND Seattle employer Amazon announced plans to hire 100,000 new full-time employees over the next 18 months.

A

rea job growth continues to stoke ebullient housing demand. New graduates and experienced hires relocate from across the country and around the world to live and work in our region, driving demand for housing at all price levels. On January 12, 2017, Seattle employer Amazon announced plans to hire 100,000 new full-time employees over the next 18 months. “In Amazon’s hometown of Seattle, the company is spreading its wings. Amazon headquarters will cover more than 30 buildings and 10 million square feet in downtown Seattle following the completion of an ongoing expansion project.”2 For perspective, that exceeds the size of Microsoft’s campus in Redmond,

R ealo g ics S otheby's Inter national Realty | rsir.com

which took more than three decades to amass its current size, yet Amazon will do it in a third less time and in the heart of an urban metropolis. The region’s hightech economy generates high volumes of hardware and software engineering positions. Besides major operations of Amazon, Google, and Apple, Geekwire reports that there are “more than 80 engineering centers in the Seattle area operated by big tech corporations, such as Facebook, Alibaba, eBay and others. These companies have set up shop in the Northwest to mine the region’s pool of tech talent. This kind of employment growth is a key factor in driving up home prices.”3


// SOUND TR ANSIT EN ROUTE, BUT RUNNING L ATE // 7

SOUND TRANSIT’S PROMISED BENEFITS ARE BEING GRADUALLY DELIVERED A GENERATION LATER THAN PLANNED

SOUND T RAN S I T EN ROUTE , BUT RU N N I N G L AT E

T

hroughout metropolitan Seattle, including the Eastside, urban growth regulations and physical geographic constraints continue to channel real estate demand upward, with infill opportunities being progressively exhausted. The region has at last begun to pay the price of delayed infrastructure improvements, most notably those relating to urban public transportation that might have otherwise allowed concentrated development to proceed a decade or two before. Hobbled in the 1990s, first by voter antipathy and later by scandal, Sound Transit’s

promised benefits are gradually being delivered a generation later than planned. Regional transportation improvements during the 1990s were substantially delayed by anti-tax initiatives such as I-695, which steeply reduced the motor vehicle excise tax (MVET). These funds were used for projects including local transit and ferry capital investment. Meanwhile, projects that would have required toll financing failed to win over local voters. RSIR Research Editor and Publisher William Hillis was a fiscal analyst at WSDOT’s financial planning office at that time.;

R ealo g ics S otheby's Inter national Realty | rsir. com


8 / / SOUND TR ANSIT EN ROUTE, BUT RUNNING L ATE //

CONT I NU ED | SOUND TRA NSIT EN ROUTE , BUT RU NNI N G LATE

13.4

16.4

PERCENT YOY INCREASE BELLTOWN/DOWNTOWN

PERCENT YOY INCREASE WEST BELLEVUE

“Voter sentiment throughout the 1990s reflected a longstanding expectation that transportation taxes should be directly connected to benefits resulting from projects, and that projects, once paid for, should not be taxed again. As our population has become increasingly diverse, welcoming new residents from states where public transit is an expected and a necessary complement to urban living, those attitudes have gradually subsided, allowing urban planners and our state legislature greater flexibility in transportation funding and delivery.”

For now, however, the delays have been costly in terms of urban densities and housing affordability. Seattle reportedly has “the worst evening commute in the country” after Los Angeles, and is “tied for fourth when it comes to overall congestion.”4 Traffic congestion that adds hours to daily commutes to downtown and the Eastside is forcing affluent homeowners, who might prefer to drive in from exurban locations to choose homes much closer to their work in the CBDs, consequently driving up prices near those areas. Single-family home prices in Central Seattle, Magnolia, Queen Anne and Ballard have risen by 11.0 percent, 13.9 percent, and 12.1 percent respectively. Southeast Seattle saw a 17.8 percent increase year-over-year.

In November 2016, voters approved Sound Transit 3 and its funding package of sales tax, property tax and MVET. The $54-billion schedule of planned projects will ultimately comprise a 116-mile regional network. Sound Transit now carries more than 150,000 riders each weekday. As the routes and facilities are built out, we expect transit-oriented development to advance—including construction of highrise condominiums at or near the stations, where commuters can easily embark for their workplace destinations at any point along the network. Magnolia $ 1 ,78 0,0 0 0 SO L D

R ealo g ics S otheby's Inter national Realty | rsir.com

2016 SINGLE FAMILY HOME PRICES

11.0

PERCENT YOY INCREASE CENTRAL SEATTLE

13.9

PERCENT YOY INCREASE MAGNOLIA /QUEEN ANNE

12.1

PERCENT YOY INCREASE BALLARD

17.8

PERCENT YOY INCREASE SOUTHEAST SEATTLE


// A SURGE IN FOREIGN BUYERS // 9

A SURGE I N FO RE I GN BUY E RS

T

he Eastside is also host to leading international employers, and here too, we saw substantially higher home prices over 2015. Among Eastside towns, Woodinville and Redmond stood out with 17.2 percent and 16.8 percent growth year-over-year. Besides enjoying the intensifying concentration of real estate purchases seen in Seattle, evidence is accumulating that in recent years, these areas have proven consistently attractive to immigrant buyers. Not only are they seeing a burgeoning influx of such

buyers, but increasingly, new businesses targeting foreign buyer's needs and preferences, ranging from supermarkets, to restaurants, to private banking and financial services. In 2016, we at Realogics Sotheby’s International Realty continued our program of foreign buyer outreach and education, rolling out our groundbreaking Chinese bilingual WeChat channel and Seattle Luxury Living publications. Although the foreign buyer demand for Seattle and Eastside real estate has

Bellevue $4,000,000 SOLD

been building for some years, the recent uptick in interest is at least partly attributed to the British Columbia government’s sudden enactment of a 15-percent transfer tax on foreign buyers in August 2016. The immediate imposition of the tax, enacted without a public notice-and-comment phase, caught buyers, sellers, and real estate professionals by surprise. Subsequently, some prospective buyers and investors turned their eyes southward toward Seattle, and a surge in

R ealo g ics S otheby's Inter national Realty | rsir. com


10 // A SURGE IN FOREIGN BUYERS //

CONTI NU ED | A SURGE IN FO REI GN BUYERS

SEVP PRIVATE SCHOOLS IN THE PUGET SOUND Washington State is home to a large number of private preparatory schools, colleges, and universities participating in the Student and Exchange Visitor Program (SEVP). Only these SEVP-certified schools can provide a student with an I-20 form required to obtain an F-1 student visa.

Lakeside School The Overlake School

buying followed. Realogics Sotheby’s International Realty helped break the story locally, which proceeded to garner front page news in Seattle as well as Vancouver. Articles in Bloomberg in December 2016 and Forbes in March 2017 described the gathering indications that the Vancouver tax helped to tip the scale in Seattle’s favor, adding to the catalog of advantages enjoyed by residents here: strong economic fundamentals, respected and renowned educational establishments, comparative affordability and a high quality of life. According to Chinese international home-buying portal Juwai. com, in the months following imposition of the transfer tax, inquiries about homes in Vancouver during the second half of 2016 dropped an average of 43.4 percent per month compared with the year earlier, while in Seattle they rose by 93 percent year-over-year in September 2016, 78 percent in October, and 140 percent in November.

buyers, Seattle is the New Vancouver” according to the headline in the Wall Street Journal article. Several members of our Asia Services Group were tapped while compiling data for this story. Our brokers confirmed that at least five of our benchmark sales on the Eastside set records for prices paid and all of them were sold to Mainland Chinese buyers.

Annie Wright Schools The Bush School The Bear Creek School The Northwest School Charles Wright School University Prep Holy Names Academy

AT LEAST FIVE OF OUR BENCHMARK SALES ON THE EASTSIDE SET RECORDS FOR PRICES PAID AND ALL WERE SOLD TO CHINESE BUYERS

By February of 2017, the verdict was more definitive: “For Chinese Home-

R ealo g ics S otheby's Inter national Realty | rsir.com

West Sound Academy Seattle Preparatory School Spring Street International School Forest Ridge School of the Sacred Heart Shoreline Christian School Bellevue Christian School

SOURCES:

Niche (niche.com); DHS Study in the States (studythestates.dhs.gov)


// BARRIERS T O TAXES IN WASHINGT ON STATE // 11

Coal Harbour VA N C O U V E R | CA N A DA

BARRIERS TO TAXES IN WASHINGTON STATE

T

he means by which the Vancouver tax was imposed contrasted sharply with the consideration and enactment of tax measures in Washington State, not only including those passed to fund the aforementioned transit improvements, but others brought before the region’s voters last year. In Washington, neither the Governor nor any local executive can unilaterally impose a tax in their jurisdictions. In 2013, the State Supreme Court voided the I-601 provision requiring a super-majority of the state legislature to approve a state tax increase.5 However, legislative action, or—for local taxes—local elections are still required, and the state’s voters have been vigilant in protecting the state’s tax-averse reputation. They have jealously guarded their pocketbooks, especially from the occasional threat of a state income tax.

52 percent opposed to 48 percent in favor. Initiative 1 was reportedly designed to as a test case against current state law.6 Local income taxes are forbidden under legislation enacted in 1984. Voters have repeatedly rejected such proposals since the income tax was ruled unconstitutional in 1932. Washington is one of seven states eschewing a personal income tax, alongside Alaska, Florida, Nevada, South Dakota, Texas and Wyoming. Likewise, our brokers cite an increase in individuals establishing Washington residency, mostly from California, in order to avoid one of the highest combined tax states in the union. Living here, at least for six months of the year, typically includes wintering in their existing California home. The cost of a summer home and the travel could well be recovered in the annual tax savings of significant passive income earners.

Continued resistance to an income tax was sampled this year by a local ballot measure in Olympia, which was rejected in November by a vote of

R ealo g ics S otheby's Inter national Realty | rsir. com


12 // WEIGHING VOTERS' C ONCERNS //

I

n addition to the means by which a tax is imposed and who must pay, the use of funds collected from taxes have also been among the voters’ considerations. In Seattle, residents are acutely aware of affordability challenges for low wage-earners and their families. The culture of the region is one that often allows measures that are expressly aimed at improving the basic quality of life for residents. In August 2016, Seattle voters approved the fifth housing levy in two years. Seattle Mayor Ed Murray described the voters’ decision in a Seattle P-I interview: “It shows that the city is pretty united when it comes to equity, affordability and livability.”7 He also correctly predicted the success of the Sound Transit 3 measure in November. The same article announced the failure of an initiative which could have created a public development authority to preserve a section of Seattle’s Alaskan Way Viaduct as an elevated park. The viaduct has been scheduled for demolition and is regarded by many residents as an eyesore as well as an earthquake risk.

WEIGHING VOTERS' CONCERNS IN 2017 AND BEYOND, GROUND WILL BE BROKEN ON MORE CONDOMINIUMS, AND MORE APARTMENTS WILL BE CONVERTED, AS THESE OFFER THE ONLY MEANS OF ACCOMMODATING THE REGION’S DEMAND FOR HOUSING AMONG FIRSTTIME BUYERS.

R ealo g ics S otheby's Inter national Realty | rsir.com


// RISING INTEREST R ATES PROVIDE AN INCENTIVE T O BUY // 13

RISING INTEREST RATES PROVIDE AN INCENTIVE TO BUY

METRO AREAS WITH RENT GROWTH DROPS OF 100 OR MORE BASIS POINTS

SEATTLE PHOENIX DALLAS

I

n the first half of 2016, the sense of urgency about housing affordability was partly driven by anxiety, as rents appeared to skyrocket at rates not seen elsewhere in the country. However, according to Axiometrics, rents in Seattle cooled after June, and by December the area had joined cities across the country in seeing lower rents on the year. "Rent growth in many major markets fell precipitously in 2016. ... Even continuously strong metros like Seattle, Phoenix, Dallas and Atlanta experienced rent-growth drops of 100 basis points or more."8 Yet the year-end softening will not assuage those renters alert to the loss of earned equity through rental payments. Other factors, such as impending interest rate hikes, are also being factored into decisions to buy rather than rent. Some who were on the edge of deciding between buying or renting were pushed into the buying camp by the Federal Reserve’s quarter-percent rate adjustment on December 14. The likelihood of future rate increases in 2017 has others either locking in loans or shopping for the first time. Those who invest wisely now will be well prepared for the region’s next run of price appreciation. In 2017 and beyond, ground will be broken on more condominiums, as these offer the only means of accommodating the region’s demand for housing among first-time buyers. This is necessitated by the large and growing number of mid-career employees with the region’s top employers. Yet few new condominium towers are under construction. One of them is Burrard Group’s NEXUS, offered for sale by RSIR. NEXUS will be a 41-story high-rise tower, with 382 units, will be open to occupants in mid-2019. As of the print date of this report, 75 percent of these units already had been sold. Construction began in January, 2017.

ATLANTA R ealo g ics S otheby's Inter national Realty | rsir. com


14 // IMPACT OF A NEW PRESIDENCY //

I M PA C T O F A

N EW P RESI D EN CY E

lection of an internationally famous real estate developer as President of the United States hardly sounds like bad news for property prices, but the anti-immigration component of the new President’s campaign foreshadows modification of programs that have brought many new residents to the Puget Sound region. Although any policy changes will be competing with other Presidential policy initiatives for Congressional action, we expect immigration to receive priority given the attention it received during the 2016 election campaign. We expect updates to EB-5, H1B, student visas and other programs used to enter the

SEATTLE IS MOST LIKELY TO BENEFIT FROM AN OUTMIGRATION OF TALENT FROM EUROPE AS WELL AS ASIA

country legally and to set a path toward immigration and building a new life in the U.S. Already this year (2017), the U.S. Department of Homeland Security has proposed raising the EB-5 threshold investment requirement to $1.35 million in an EB-5 regional center, a 170-percent jump from previous threshold of $500,000.9 The principle of birthright citizenship remains constitutionally protected, but was challenged by President Trump during his campaign. Early signs of the promotion of the return of manufacturing may raise hopes for Rust-Belt cities in the Midwest. However, companies that are closest to venture capital and technology centers, like Seattle, might actually benefit first, particularly with the technological advancement of all aspects of business and production in the years since their industries were outsourced. If this should happen, businesses in the Puget Sound region could profit “hugely” from Trump’s reshoring policies. This prospect might be raised further in the event that cracks in the European Union spread so as to threaten its sustainability. Seattle is most likely to benefit from an outmigration of talent from Europe.

R ealo g ics S otheby's Inter national Realty | rsir.com


// OUTLO OK FOR 2017 // 15

OUTLOOK FOR

1

EMPLOYERS

Uninterrupted growth in employment by major Puget Sound companies will lead to increased urbanization—upward, not outward. Current regulations will not allow growth to spread out into the county and increased travel times are already testing commuters’ endurance. Reshoring of U.S. employment accompanied by deterioration in European economies might lead to even greater concentration of population and development.

2

INVENTORY

If interest rates continue to rise as anticipated, we can expect higher pressure on renters to take advantage of opportunities to buy into the residential market, particularly from the entry-level to the mid-range of the condominium market as newly constructed or converted units are opened for sale. Due to the shortage of high-rise condos (except for the aforementioned NEXUS

project), much of this demand must be shoe-horned into older condominiums or condo conversions until after 2020. Meanwhile, we expect no decline in the demand for high-end luxury units or single-family residences. On the contrary, median prices in Seattle and the Eastside are still far behind competing markets in New York, California and overseas, from which we have been drawing experienced executives and other relocating buyers. These gaps will not be closed for years.

3

TRANSPORTATION

We anticipate that the vote in favor of Sound Transit 3 means that the entire Sound Transit network will move forward to completion. This has implications for transit-oriented development projects in the vicinity of system transfer stations and terminals throughout the region. It may, however, be too little too late as the region grasps with global city opportunities stacking upon more provincial infrastructure.

4

2017 URBANIZATION

Directly connected with our remarks above about urbanization and transit-oriented development, due to commuters’ attempts to avoid regional traffic congestion, we expect that purchases near the headquarters, offices, and other employment centers of the region’s top employers will cause median home prices in these locations to steadily rise. Watch for acceleration with median home prices downtown and lesser gains as concentric rings emanate outward.

5

IMMIGRATION

We should see any action on non-refugee immigration programs as occurring later this year or next due to extensive Congressional debate and negotiation. In the interim, we expect a rush on the part of attorneys of individuals and families to conclude applications that already have been submitted. We expect the threshold for EB-5 qualification to be raised and we

expect an ultimate reduction in H1B admissions, which will have some impact on top regional employers in the tech industry.

6

GLOBAL CAPITAL

Threatened capital controls in China may inhibit new exits from that country, but not those persons who have already transferred funds or invested them overseas. There is an abundance of Chinese nationals who sold business shares in the aftermath of the 2007/8 financial crisis and whose profits from these funds already rest in safe havens around the world. Increasingly, we find Seattle to be among those world cities on the rise, hence global capital is finding its way here.

R ealo g ics S otheby's Inter national Realty | rsir. com


16 // MEDIAN SELLING PRICE BY C OUNT Y //

W H ATC O M + 8 .7 3 % $ 2 9 9,0 0 0

SA N J UA N + 5. 8 8 % $ 4 5 0,0 0 0

ISLAND + 9. 2 9 % $ 3 0 6,0 0 0

JEFFERSON +11.32% $ 3 0 0,0 0 0 G R AYS HARBOR + 6.4 2 % $ 14 5,0 0 0

K I TSA P + 9. 3 0 % $ 2 8 2 ,0 0 0 M AS O N +12.32% $ 1 9 0, 9 5 0 T H U R STO N +7. 57 % $262,500

S K AG I T + 9.76 % $ 2 7 9, 9 0 0

SNOHOMISH + 1 0.4 4% $ 3 69, 9 9 0

KING + 1 2 .6 4% $ 4 9 0,0 0 0

- $200,000 - $300,000 - $400,000 - $500,000 +

R ealo g ics S otheby's Inter national Realty | rsir.com

K I T T I TAS + 5.4 9 % $ 2 5 0,0 0 0

P I E RC E +11.38% $ 2 7 3, 9 9 5

MEDIAN SELLING PRICE BY COUNT Y $100,000 $200,000 $300,000 $400,000 $500,000

CHELAN +7.4 3 % $ 2 8 4 ,70 0

2016


// MEDIAN SELLING PRICE BY ZIP C ODE // 17

98370

98133

-1.04% $336K

13.04% $650K

32.24% $405K

98392 14.57% $228K

21.46% $470K

5.22% $647K

10.22% $620K

98199

98119

8.09% $735K

15.16% $709K

98101 12.23% $610K

14.38% $501K

16.11% $639K

98126

6.06% $910K

11.35% $520K

98106

98040

16.22% $538K

24.32% $345K

98168 18.77% $310K

98006 9.84% $787K

98029 14.56% $590K

90

13.79% $450K

98178 16.44% $354K

900

98059

98027

6.26% $501K

405

98057

9.71% $565K

10.73% $305K

169

98188

515

16.00% $290K

98058

98055 167

509

14.41% $385K

7.67% $320K

169 18

181

98031

98198 10.91% $305K

98032 14.27% $265K

11.29% $345K

98038 12.10% $410K

515

98030 5

167

MEDIAN SELLING PRICE BY ZIP CODE $100,000 $300,000 $500,000 $700,000 $900,000

14.84% $913K

90

98056

5.88% $450K

98148

98075

15.19% 98118 $446K 13.64% $455K

98166

16 6

98070

19.63% $488K

$569K

10.90% $388K

22.36% $409K

13.33% $765K

17.70% $665K

98007

98009405

90

98074

98008

20.53% 9.69% $1.145M $713K

98108

98146

160

98004 98005

13.64% $1.250M

13.09% $579K

18.33% $710K

$995K

4.67% $2.151M

10.98% $632K

98136

98053

520

98015

98122 98039

10.65% $564K

8.49% $470K

18.83% $650K

10.47% $801K

202

98144

98116

98052

98033

98102

14.17% $620K

7.10% $430K

-6.15% $305K

202

98105

98112

5

98104

98134

203

16.24% $756K

98109

98121

303

18.55% $492K

16.72% $677K

98103

305

9.75% $760K

405

98115

17.25% $680K

2.84% $580K

98077

202

5

98117

98107

24.24% $615K

98034

11.96% $483K

3

98110

9.56% $550K

98125

98072

7.42% $460K

98028

98177

98342

522

98011

98155

13.87% $435K

10.53% $315K

18

516

516

2016

- $300,000 - $500,000 - $700,000 - $900,000 + R ealo g ics S otheby's Inter national Realty | rsir. com


18 // C OUNTIES IN THE PUGET SOUND //

7 W

KEY COUNTIES IN THE PUGET SOUND

ithin the past two years, the inventory of housing for sale in Western Washington State has completed a large bell-shaped curve, returning to degrees of shortage not seen since the year 2005. The impact is most remarkable in the Greater Seattle area of King, Pierce, and Snohomish counties. This region of central Puget Sound has remained a seller’s market since January 2015, with inventories in most areas remaining below four months for nearly the entire year. These three counties are host to key employers in Western Washington, along with many of their customers and contractors. Areas in where these employers are located enjoy the employment-related housing demand described in Section I that keeps inventories down and prices up. Areas of Kitsap County share this dynamic to a lesser degree due to the op-

R ealo g ics S otheby's Inter national Realty | rsir.com

tion of commuting by ferry. Employment related demand is far less keenly felt in counties further away from the largest employers, whose housing markets instead tend to rely for growth on retiring workers and owners of second homes. Areas of these markets, such as Skagit and Jefferson counties, therefore see different trends in inventories and prices than those exhibited among the communities of central Puget Sound. Other factors that attract individuals to the seven counties that are subjects of this report include the region’s arts and entertainment venues and the top schools throughout western Washington. All seven of these counties benefit from the region’s natural beauty, outdoor recreation opportunities as well as its reputation of inclusiveness and hospitality to visitors and new residents from across the country and around the world.


// C OUNTIES IN THE PUGET SOUND // 19

C OU NT IE S ANNU AL M E D IAN PRIC E S

$2 40.0K

$2 5 8.0K

$282.0K

$2 2 6.0K

$2 46.0K

$2 74 .0K

$2 3 3 .0K

$2 5 5 .0K

$2 79 .9 K

$3 05 .0K

$3 3 5 .0K

$3 70.0K

$45 0.0K $3 95 .0K

$42 5 .0K

$400.0K $300.0K $2 5 9.5 K

$2 69.5 K

Sn o h o mish

Skag it

San Ju an

Pierce

Kitsap

Kin g

Islan d

Jef f erso n

$0K

2016 $490.0K

$400K

$43 5 .0K

$300K

$306.0K $2 5 9.0K

$2 80.0K

$200K

2014 $600K

2015 $500K

$100K

Kirkland $2,175,000 SOLD


20 // KING C OUNT Y REPORT //

KIN G COUNT Y

K

ing County is by far the most populous county in the state, an estimated 150% larger than second-ranked Pierce County on its southwest border. Washington State’s largest city, Seattle, and 16 of the 24 featured areas in Section III of this report are in King County. King County is home to all ten of Washington State’s Fortune 500 companies, with five of them headquartered in Seattle: Amazon, Starbucks, Nordstrom, Expeditors International, and Alaska Air Group. Many of Washington State’s top-rated schools are also located here, including most of the SEVP private schools listed in the side bar on page 16. Other attractions of King County are described in the Section III area profiles. The NWMLS classifies transactions of more than one million dollars as “high end sales,” and by far the greatest number of these sales occur in King County—specifically in Seattle and on the Eastside, where in 2016, 1,855 and 2,412 of these sales were closed respectively. The number of these

11.3 PERCENT CLOSED SALES WERE UP IN 2016 FOR KING COUNTY

21.7 PERCENT HIGH END SALES WERE UP IN 2016 FOR KING COUNTY

Madison Park | Seattle $2,000,000 SOLD

transactions has ballooned in recent years, although the pace of growth decelerated last year. In 2016, while the number of closed sales in King County generally were 11.3 percent higher year over year, high end sales were up 21.7 percent in King County, 18.3 percent in Seattle, and 25.3 percent on the Eastside. Although much higher than the general increase in prices, these rates were somewhat moderate compared with the rapid growth of the preceding year (2014-15): +39.1 percent, +57.9 percent, and +26.7 percent, respectively. Seattle’s growth is prompting the addition of new construction high-rise condominiums, adding exciting new inventory for residents to move up or move down to. Among the counties, Snohomish was a distant second in the number of high end sales closed, with 288 such transactions (although this was a round 80 percent increase year-over-year, following 2015’s 95.1 percent year-over-year increase). Pierce County was third, with 88 high end sales. The remaining counties in the Puget Sound region saw such sales in double digits or fewer.

R ealo g ics S otheby's Inter national Realty | rsir.com

For four Central Puget Sound counties— King, Snohomish, Pierce, and Kitsap— the NWMLS reported over 95,110 active listings during the year, 71,407 of which were closed. Under the influence of growth management restrictions and increasing costs of construction, the median price of newly-constructed single-family homes in King County was $705,052, an increase of 11.7 percent over the 2015 median for new construction. King County has been a strong seller’s market for a fifth consecutive year (since 2011). The average monthly supply of homes for sale remains lower than any other county served by the NWMLS, averaging 1.11 months in 2016, down from 1.4 months in 2015, and from 1.9 months in both 2014 and 2013. The county’s combined SFR and condominium monthly sales volume peaked in June 2016 at $2.38 billion. The annual median price of all homes in King County was $490,000, a year-over-year increase of 12.7 percent.


// KIT SAP C OUNT Y REPORT // 21 Like Pierce County, this year Kitsap County shifted from a balanced market to a seller’s market, with average monthly supply tightening to 1.9 months in 2016 from 2.7 in 2015, 4.1 in 2014, and 4.9 in 2013. The monthly median home price of all homes in the county reached $295,000 in June 2016, and the annual median settled at $281,000, an 8.08 percent increase year-over-year. The county is sufficiently remote so that new construction is more speculatively priced than that found in markets closer to the cityscape. As a result, monthly median price changes for newly built homes in Kitsap County have seen more volatility over the past two years than new homes in the three counties of the Seattle MSA; but nevertheless, the trend in 2016 was higher on an annual basis. The median price of new construction peaked in December 2016 at $392,000, and the annual median was $310,327—2.4 percent lower than in 2015, when Kitsap County saw the largest year-over-year increase in central Puget Sound.

DE C E M B E R 2 0 1 6 M E DIA N P R IC E F OR N E W C ON ST RU C T ION

$392,000

KITSAP COUNT Y

B

y a short ferry ride across Puget Sound, the Kitsap Peninsula and its adjacent islands offer waterfront homes, stunning city, sound, and mountain views and an easy getaway to bucolic scenes westward toward Hood Canal and the Olympic Peninsula. Areas in Kitsap County selected for community profiles in Section III include Bainbridge Island and Poulsbo. The former’s proximity to Seattle means that Bainbridge Island in particular enjoys the best of exurban and rural lifestyles: for some, a place of refreshment after the daily commute; for others, a weekend hideaway or reward for retirement. Kitsap County is also home to military families and contractors at the Puget Sound Naval Shipyard at Bremerton.

Bainbridge Island $1,699,000 SOLD

R ealo g ics S otheby's Inter national Realty | rsir. com


22 // JEFFERSON C OUNT Y REPORT //

J EFFERSO N COUNT Y

B

anding the Olympic Peninsula from the Admiralty Inlet and Hood Canal in the east to the Pacific Ocean in the west, Jefferson County stretches from the resort community of Port Ludlow and historic Port Townsend into the remote wilderness of the Olympic National Park. Port Ludlow is profiled in Section III. Although home to many small businesses, Jefferson County is highly dependent on tourism and second-home investment. The population is estimated to have grown by only 2.0 percent from 2010 through 2015. Port Townsend, the county seat, is the county’s only incorporated town. At 4.46 months in inventory, the 2015 supply has been balanced; although higher than other subject counties, it is far more constrained than in 2015 at 6.4 months, 2014 at 9.5 and 2013 at 10.8. At $300,000, the 2016 median price in Jefferson County accelerated its ascent from 2015’s

lackluster rate of 3.85 percent, rising by 11.32 percent. Buyers in these locations should not purchase with the intent to flip and sellers here can especially benefit from professional staging and marketing of their properties for sale. As eastern Jefferson County lies in the “Olympic rain shadow,” Port Townsend and its neighboring communities enjoy the greatest number of days of sun in the Pacific Northwest—and for boat owners, its coastal villages are only a three to seven-hour cruise from the recreation of the San Juan Islands. Brokers with Realogics Sotheby’s International Realty report continued interest from California homebuyers in these and other towns on the Olympic Peninsula. As second-home owners and retirees discover the combined benefits of low taxes, relative affordability and lifestyle attractions, this market is likely to make gains on its peers which are closer to Seattle.

Po r t L u d l ow $849,900 SOLD

R ealo g ics S otheby's Inter national Realty | rsir.com

2.0 PERCENT POPULATION GROWTH FROM 2010-2015

11.3 PERCENT YOY INCREASE IN JEFFERSON COUNTY


// SKAGIT C OUNT Y REPORT // 23

Anacortes $1,020,000 SOLD

SKAG IT COUNT Y

O

f Skagit, Island, and Jefferson counties, Skagit is the most convenient as a commuter point of origin, as the other two counties require either the combination of a long drive with a ferry ride or a very long drive without the ferry. This county saw an annual median price of $275,299 in 2016, up by 5.9 percent from 2015. However, Skagit County bears its own constraints to growth, which at least in the short run will sustain the value of current housing and approved development. The Skagit County Commission, various preservation groups and other interested parties have acted aggressively to protect farmland and open space in the most arable regions of the Skagit Valley, driving new development south and east of I-5, or west to Anacortes. Fidalgo Island and Anacortes are among the areas more closely examined in Section III.

COUNTI ES YOY CHA NGE I N M EDI A N PR I CES

10.44%

Snohomis h

2016

9.84% 9.76%

Skagit

2015

9.44% 5.88%

S a n Jua n

7.59% 11.38%

Pier ce

8.85% 9.30%

Kits ap

7.51% 12.64%

King

8.75% 11.32%

Je f f e r s on

Even for this exurban county, the comparative lack of new construction has caused the average monthly supply of homes to tighten to 2.5 months, down

SKAGIT COUNTY SAW AN ANNUAL MEDIAN PRICE OF $275,299 IN 2016, UP BY 5.9 PERCENT FROM 2015.

from 3.7 in 2015 and well into seller’s market territory. As a result, the median price of new construction rose in Skagit County almost as quickly as it did in Kitsap County: 9.1 percent year-over-year in 2015.

3.85% 9.29%

I s land

8.11%

0

0.05

0.1

0.15

0.2

0.25

R ealo g ics S otheby's Inter national Realty | rsir. com


24 // PIERCE C OUNT Y REPORT //

P IERC E COUNT Y

T

he state’s second most populous county, Pierce County is 9.2 percent more populated than third-ranking Snohomish County, though that gap has been gradually reduced. Tacoma, the largest city in the county and third-largest in the state, is a major Pacific Rim container port. For international students, the city is also home to 11 SEVP private schools and 21 SEVP high schools. In 2016, Pierce County shifted from a balanced market to a seller’s market, with average monthly supply tightening to 1.74 from 2.7 in 2015, and 3.6 in 2014. The monthly median home price peaked in August 2015 at $252,500; and the annual median was $246,000, a year-overyear increase of 8.85 percent.

H a r b o r R i d g e | Ta c o m a $399,950 SOLD

THE MONTHLY MEDIAN HOME PRICE PEAKED IN AUGUST 2015 AT $252,500; AND THE ANNUAL MEDIAN WAS $246,000, A YEAR-OVER-YEAR INCREASE OF 8.85 PERCENT.

R ealo g ics S otheby's Inter national Realty | rsir.com


// SNOHOMISH C OUNT Y REPORT // 25

Stanwood $2,000,000 SOLD

SNO HO M I S H COU N T Y

S

nohomish County’s median home price in 2015 was $365,000, a 10.44 percent increase over 2015 prices. Some of this growth has occurred naturally as buyers are drawn to the quality of life in this county, which is a midway point between the city amenities in Seattle and the natural wonders of the North Cascades. However, another factor is the pricing out of middle-class households from the gentrifying urban neighborhoods and suburbanizing rural areas of King County. From 2010 through 2015, Snohomish County grew at a modestly slower pace than the state leader, with a 8.29 percent increase compared to King County’s 9.62 percent. Like its more populous neighbor,

Snohomish County has been a seller’s market for homes since 2012. This year, the supply tightened to 1.25 months from 1.9 months in 2015, and 2.6 in 2014. Monthly home sales volume reached $626.5 million in August, with the median SFR and condo price peaking at $380,000 in the same month. Specific areas in Snohomish County that we address in our survey of the region include Southwest Snohomish County (e.g., Brier, Lynnwood, Edmonds, and Woodway); Northeast Snohomish County (Lake Stevens), Everett and Mukilteo.

2 0 1 5 M E DIA N P R IC E I N SNOHOM I SH C OU N T Y

1.25 MONTHS OF SUPPLY FOR 2016

$365,000

R ealo g ics S otheby's Inter national Realty | rsir. com


26 // ISL AND C OUNT Y REPORT //

88 NEWLY-CONSTRUCTED HOMES WERE ADDED IN 2016

THE KITSAP PENINSULA AND ITS ADJACENT ISLANDS OFFER WATERFRONT HOMES, STUNNING CITY, SOUND, AND MOUNTAIN VIEWS

I S L A ND COU NT Y

B

oth Island and Jefferson counties are considerably more remote than those previously discussed. Island County is just close enough to major employment centers in King County to allow travel to work by its most resilient commuters who are employed there. Island County’s largest employer is the U.S. Navy, primarily at Naval Air Station Whidbey north of Oak Harbor on Whidbey Island. This island is the fourth longest and fortieth largest in the contiguous United States; Coupeville at its center is the county seat. Although two elementary schools are located on Camano Island, the second major island in the county is primarily a retirement haven and a vacation retreat. It is profiled in Section III of this report.

Clinton | Whidbey Island $1,350,000 SOLD

R ealo g ics S otheby's Inter national Realty | rsir.com

There are no incorporated towns on Camano Island, and none but Langley south of Coupeville on Whidbey Island. Only 88 newly-constructed homes were added in 2016, down from 101 in 2015. Given this slow rate of new home construction, the average monthly supply in Island County has also reached seller’s market levels, having tightened to 2.84 months in 2016 from 3.9 months in 2015, 5.8 in 2014, and 7.3 in 2013. Prices in 2016 were volatile and irregularly advancing. The monthly median price of SFRs and condos here peaked at $335,000 in January; yet the county still ended the year higher than in 2015, with an annual median price of $305,000, 9.3 percent higher than the median for 2015.


// C OMMUNITIES AROUND THE PUGET SOUND // 27

23

AT A GLANCE

COMMUNITIES AROUND THE PUGET SOUND

201 6 NWM LS ARE AS Y OY M E D IAN PRIC E C HANG E 815 - ANACORTES

7.40%

780 - CAMANO ISLAND

12.29% 8.35% 9.92%

760 - NORTHEAST SNOHOMISH 74 0 - E V E R E T T/ M U K I LT E O

18.06%

7 1 0 - N O R T H S E AT T L E

11.01%

70 5 - BA L L A R D/G R E E N L A K E

13.36% 12.94% 15.39%

7 0 1 - B E L LT O W N / D O W N T O W N 700 - QUEEN ANNE/MAGNOLIA 6 0 0 - J U A N I TA / W O O D I N V I L L E

10.76%

5 6 0 - K I R K L A N D/ B R I D L E T R A I L

15.79%

5 5 0 - R E D M O N D/C A R N AT I O N

12.89%

540 - EAST OF LAKE SAMMAMISH

15.31% 16.40% 13.64%

530 - BELLEVUE/EAST OF I-405 520 - BELLEVUE/WEST OF I-405 510 - MERCER ISLAND

6.56%

500 - EAST SIDE/SOUTH OF I-90

14.54% 13.63%

489 - PORT LUDLOW 3 9 0 - C E N T R A L S E AT T L E

11.55%

3 8 0 - S O U T H E A S T S E AT T L E

5.22%

170 - BAINBRIDGE ISLAND 166 - POULSBO

-1.38% 12.64%

1 4 0 - W E S T S E AT T L E

20.93%

13 0 - BU R I E N / N O R M A N DY

-0.05

9.5 PERCENT INCREASE OF MEDIAN HOME PRICES

0

0.05

0.1

The aforementioned 9.5 percent gain in median home sale prices recorded for home in regions covered by the NWMLS was actually surpassed in many areas served by Realogics Sotheby’s Int'l Realty. In 18 of 25 areas studied, median prices were higher yearover-year than the overall figure reported.

0.15

0.2

0.25

In this section, we describe some of the key draws for homebuyers and other features of each of these 25 areas, followed in each case by statistics from the 2016 home-buying year. The statistics in this section have been extracted from the NWMLS database and analyzed by RSIR. As such, the NWMLS requires notice that they are not compiled or published by the Northwest Multiple Listing Service.

R ealo g ics S otheby's Inter national Realty | rsir. com


28 // C OMMUNIT Y REPORT S //

Escala | Downtown Seattle $8,000,000 SOLD

40 $600K

$500K

$529K

After two years of near-continuous contraction (from April 2014 through April 2016), the monthly supply of condominiums for sale slackened just a bit over the summer before tightening through the end of the year. Belltown

$700K

$400K

$300K

CO N D O M I N I U M

35 30 25

$403K

T

he Belltown/Downtown area is where many Seattle landmarks, like Pike Place Market and Smith Tower, are to be found. Fortune 500 companies Amazon, Nordstrom and Expeditors International are headquartered here. Among the many ongoing projects downtown, construction will begin on NEXUS, a 41-story high-rise condominium tower with 382 units which is scheduled to open in mid-2019. There are currently 62 tower cranes in downtown Seattle – more than any other US city. However, only a few are likely to deliver any “for sale” inventory. The supply and demand imbalance can be seen in home prices, which are not uncommon to crest above $1,000 per sq. ft.

B E LLTOWN/DOWNTOWN: QU ART E RLY M E D IAN D AY S ON M ARKE T

B E LLTOWN/DOWNTOWN: ANNU AL M E D IAN PRIC E S

$615K

B ELLTOW N / D OWN TOW N

20 15

$200K

10 5

$100K

0 2014

$0K 2014

2015 Condominium

2015

2016

2016 Condominium

and Downtown together comprise a strong seller’s market, with 1.4 months in supply in 2016, down from 1.7 in 2015 and 2.4 in 2014. Median sale prices continued to rise, but at a pace comparatively more measured than 2015’s frenetic 30-percent gain, driven mostly by the delivery of new construction high-rise condominiums. The median price of a downtown condominium ended the year at nearly double the countywide median for condos, higher by +95.3 percent at $637,500.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 29

Broadmoor | Seattle $6,150,500 SOLD

$751K

$700K $600K

R ESI D E N T I AL

14

10 8

$400K

$401K

$370K

$300K $200K

CO N D O M I N I U M

12

$500K

$3 05K

Central Seattle has been a seller’s market since May 2013. Months in inventory have been

16

$800K

$700K

C

entral Seattle includes, among many others, the communities of Broadmoor, Capitol Hill, Denny Blaine, Madrona, and Washington Park. The Washington Park Arboretum is one of the world-renown institutions in this area. Garfield High School, the state’s 7th ranked public high school is located here. There are over a dozen SEVP schools in this area, including the Northwest School just blocks from downtown, Seattle Preparatory School overlooking Portage Bay, Holy Names Academy in Stevens and The Bush School on the north side of Harrison Ridge. Three of the nation’s leading hospitals are located here—Virginia Mason, Harborview and Swedish Medical Center—and Fred Hutchinson Cancer Research Center is at South Lake Union. Though not in this area, the Amazon campus is very close by.

$900K

$8 3 2K

C ENT RA L SEATT LE

C E NT RAL SE AT T LE : QU ART E RLY M E D IAN D AY S ON M ARKE T

C E NT RAL SE AT T LE : ANNU AL M E D IAN PRIC E S

6 4 2

$100K

0

$0K 2014

2015

2016

2014

2015

2016

o n d o m i n i u m downward, R e s i d e n t i a l averaging 1.2 in 2016, 1.3 in 2015 and 1.8 in 2014. gradually Ctrending Condominium R e s ide ntia l

In 2016, the median price of single-family homes and condos in Central Seattle rose by 13.6 percent, and exceeded that of King County by 28.1 percent. This is one of the areas where high end sales of homes are concentrated. Sellers continued to benefit from competition among buyers and this is one of the areas seeing substantially higher-than-list prices paid. These neighborhoods enjoy immediate proximity to Lake Washington, local parks and downtown Seattle yet maintains a decidedly boutique sense of community making them among the most sought-after residential areas in the region; with prices to match.

R ealo g ics S otheby's Inter national Realty | rsir. com


30 // C OMMUNIT Y REPORT S //

Queen Anne | Seattle $1,150,000 SOLD

35

$900K $800K

$785K

$700K $600K $500K

20

$390K

$340K

$100K

R ESI D E N T I A L

30

15

$300K $200K

CO N D O M I N I U M

25

$400K

$3 02K

Expedia.com’s scheduled 2019 move from Bellevue to its new campus along the Interbay waterfront between Queen Anne and Magnolia is expected to ultimately employ 4,500. Many employees will likely seek to avoid long commute times from the Eastside in favor of a Seattle address, helping yet again to drive more demand for housing close to the urban core. With other

$1,000K

$703K

T

he Queen Anne/Magnolia area of Seattle comprises these two neighborhoods as well as a portion of South Lake Union, where Amazon’s campus is located. Magnolia is the site of Discovery Park and the community of restored Fort Lawton homes. Queen Anne Hill is the tallest named hill in Seattle and the historic home of Seattle’s first families. This area includes The Center School, one of the top-rated public high schools in Washington. It also includes Seattle's waterfront northwest of Belltown, where F5 Networks’ headquarters are located; between Elliott Avenue and Myrtle Edwards Park.

QU E E N ANNE /M AGNOLIA: QU ART E RLY M E D IAN D AY S ON M ARKE T

$893K

QUEEN AN N E / MAG N O L I A

QU E E N ANNE /M AGNOLIA: ANNU AL M E D IAN PRIC E S

10

5

0 2014

$0K 2014 Condominium

2015 Res idential

2015

2016

2016 Condominium

R e s ide ntia l

top employers like Amazon in close proximity, homes here have been in high demand, with the market supply never exceeding five weeks in all of 2016. Months in inventory averaged 1.1 month in both 2016 and 2015, and 1.7 in 2014. Properties in the Queen Anne/Magnolia area maintained their premium over King County median sale prices during the past year: +39.1 percent in 2016, compared with +38.3 percent in 2015. Prices increased by 13.2 percent year-over-year. The price trend was less volatile in 2016 than in recent years, rising steadily in 2016 despite market size limitations.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 31

Fre m o n t | S e a t t l e $1,160,000 SOLD

$700K

$53 5K

$500K

$400K

$377K

$200K

CO N D O M I N I U M

30.00

R ESI D E N T I A L

25.00

20.00

$330K

$300K

$685K

$600K

$296K

T

he tract of land north of the Salmon Bay Waterway was originally purchased by William Rankin Ballard, who captained a sternwheel ferry to Olympia. Ballard/ Greenlake’s upscale transformation in recent years has made it a twin of North Seattle on the Lake Washington side, as these are currently highly similar markets.

B ALLARD /GRE E NLAKE : QU ART E RLY M E D IAN D AY S ON M ARKE T

B ALLARD /GRE E NLAKE : ANNU AL M E D IAN PRIC E S

$611K

BALLARD/ GREENL AK E

15.00

10.00

5.00 $100K 0.00 2014

$0K 2014

2015

2015

2016

2016

In addition to the town of Ballard, this area includes the communities of Wallingford between Lake Union and Greenlake, Phinney Ridge west of Green Lake and neighborhoods along the Puget Sound shore north of Ballard: Sunset Hill, North Beach, Blue Ridge and Broadview north of Carkeek Park.

School in northeast Ballard is also highly ranked by U.S. News. Homes here have easy access to downtown and the area is highly regarded by young urban professionals.

The area offers the world-renowned, SEVP certified, Lakeside Upper and Middle Schools attended by Bill Gates and Paul Allen as well as U.S. News-ranked Ingraham High School; all in the Haller Lake neighborhood. Ballard High

The 2016 median sale price in Ballard remained more than 24 percent above the King County average (it was 25 percent higher in 2015)—and gained ground over the year, rising by 11.0 percent from the 2015 median price.

Condominium

Res idential

Condominium

R e s ide ntia l

With markets contracting all over Puget Sound in 2016, the monthly supply of homes for sale in Ballard/Greenlake was tighter than any other market; at about three weeks in inventory. Steadily rising SFR prices (+12.3 percent) caused a precipitous drop in the supply of condos specifically, which fell by 60 percent.

R ealo g ics S otheby's Inter national Realty | rsir. com


32 // C OMMUNIT Y REPORT S //

We s t S e a t t l e $1,880,000 SOLD WE ST SE AT T LE : QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$400K

70

CO N D O M I N I U M R ESI D E N T I A L

60

50

40

$3 45K

$300K

$301K

$265K

$200K

$595K

$500K

$449K

W

est Seattle includes the neighborhoods of Alki, Admiral, North Admiral, Belvidere, Fauntleroy and Gatewood. This sub-region of Seattle was annexed to the city back in 1907, in the same year as Ballard and what has become North Seattle, and their neighborhoods share similarities and price dynamics. No other subregion of Puget Sound offers such expansive sunset views over the Olympics, northward over Puget Sound and eastward to downtown Seattle. The much-anticipated completion of the HWY 99 tunnel and corresponding waterfront improvements will improve traffic flow from West Seattle while adding a shoreline connection. The distinctive sense of community wrapped by waterways is commonly thought of as an island that you can drive to. Its most noted attribute is the promenade along Alki Beach which offers iconic views of downtown Seattle.

WE ST SE AT T LE : ANNU AL M E D IAN PRIC E S

$53 5K

W EST SEATT LE

30

20

10

$100K

0 2014

$0K 2014 CO N DO M I N I UM

2015

2015

2016

2016

RES I DEN T I AL

Condominium

R e s ide ntia l

Chief Sealth High School in West Seattle is ranked by among the top public high schools in the state. The area is still a seller’s market, with the monthly supply tightening further; from 1.1 months in 2015 to about a month this past year. As in 2015, the 2016 median price of homes in West Seattle ended the year $2,000 higher than the King County median at $490,000. The price gain was similar to that of the preceding year: +12.6 percent in 2016 compared with a 13.0 percent gain in 2015.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 33

Bryant | Seattle $ 1 , 4 3 7, 1 0 0 S O L D

$700K

$600K

$580K

$500K

$523 K

$400K

$28 8 K

$23 2K

$100K

10

5

0 2014

$0K

Beside its proximity to the Lakeside School in neighboring Haller Lake west of I-5, North Seattle is home to Roosevelt High School on the west side of Ravenna and Nathan Hale High School beside Thornton Creek; both are U.S. News-ranked. In addition, University Prep and the Seattle Waldorf School are both SEVP schools in North Seattle. This community is also home to the University of Washington – ranked 15th by the Shanghai Ranking of World Universities and the highest such ranking on the West Coast, except for other universities located in pricier markets within California.

R ESI D E N T I A L

20

$300K

$200K

CO N D O M I N I U M

25

15

$251K

B

etween I-5 and northern Lake Washington, North Seattle includes Ravenna, Bryant and Hawthorne Hills, Laurelhurst northwest of Union Bay, Windermere and View Ridge, respectively south and west of Sand Point; and Cedar Park along the western shore of Lake Washington.

NORT H SE AT T LE : QU ART E RLY M E D IAN D AY S ON M ARKE T

NORT H SE AT T LE : ANNU AL M E D IAN PRIC E S

$678K

NO RT H SEATT LE

2014 Condominium

2015 Res idential

2015

2016

2016 Condominium

R e s ide ntia l

North Seattle’s inventory trends over the past three years closely resemble those in Ballard/Greenlake, as the buyers attracted to these areas are highly similar. The supply in North Seattle was only slightly less tight than its neighbor to the west, with 0.8 months in inventory in 2016 and 2015, and 1.2 months in 2014. With an 18.1 percent gain, the median price of SFRs and condos in North Seattle accelerated in 2016 from the pace seen in 2015 and 2014 (+10.6 percent). That 2016 median price was 27.0 percent higher than the King County median.

R ealo g ics S otheby's Inter national Realty | rsir. com


34 // C OMMUNIT Y REPORT S //

Mt. Baker | Seattle $1,875,000 SOLD

CO N D O M I N I U M

100 $500K

$458K

$400K

$397K

$300K

80 70 60

$292K

$200K

R ESI D E N T I AL

90

50

$273 K

The communities along Lake Washington offer many of the same attributes of pricier neighbors to the north, providing more attainable waterfront or lake view properties. Unique to Southeast Seattle is Seaward Park – a natural environment comprising more than 300 acres that includes a 2.4-mile bike

SOU T HE AST SE AT T LE : QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$23 5K

S

outheast Seattle includes the neighborhoods of Mt. Baker, Seward Park, Leschi, Columbia City, Lakewood and Rainier Beach. This is an historic area of Seattle, and some of its oldest streets (e.g., Holgate, Lander, Wilson, Angeline, and Graham) are named after early settlers and denizens of the city. Single-family homes and condominiums in this area have been in a seller’s market continuously for the past three years and the area's market has not seen more than six weeks of homes in inventory for sale since November 2015. The average monthly supply was 1.4 months in 2016, down from 1.5 months in 2015, and 2.4 months in 2014.

SOU T HE AST SE AT T LE : ANNU AL M E D IAN PRIC E S

$540K

SOUTHE AST SEAT T LE

40 30 20

$100K

10 0 2014

$0K 2014

2015

2015

2016

2016

and walking path trails and other attractions. Andrews Bay Condominium R e s ide ntia lis a very Cond o m i n i uas m well R e s as i d e nhiking tial popular boating destination and allows for short term anchorage. Many of the communities of Southeast Seattle are proximate to the expanding Link Light Rail system along Martin Luther King Jr. Way which offers a quick and convenient alternative to fighting traffic when commuting to downtown Seattle or SeaTac International Airport. At $490,000, the median home price in Southeast Seattle remains higher than the county median for the second consecutive year. Prices rose in 2016, but at a slower rate year over year than in 2015 (+11.5 percent to last year’s +15.7 percent).

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 35

Mercer Island $6,200,000 SOLD

$1,000K

$800K

$1,100K

As an island surrounded by Lake Washington, the community faces some constraints on further development solutions and new development within the past five years has involved trading a few single-family homes for new multifamily housing. A current moratorium on new subdivisions and a more stringent design review process for buildings in the downtown core are suggestive of a city rethinking its future in light of significant demand and growth.

$1,200K

$992K

M

ercer Island, a bedroom community of Seattle and the region, is generally regarded as part of the Eastside, but bears a “206” area code and is effectively equidistant between Seattle and Bellevue. Its population is estimated to have grown by 10.3 percent from 2010 through 2015. Mercer Island High School is ranked among the top ten public high schools in the state by U.S. News.

M E RC E R ISLAND : ANNU AL M E D IAN PRIC E S

M E RC E R ISLAND : QU ART E RLY M E D IAN D AY S ON M ARKE T $1,250K

MERCER I S LAN D

CO N D O M I N I U M

80

R ESI D E N T I A L

70 60 50 40

$600K

30 $400K 20 $200K

10 0

$0K

2014 2014

2015

2015

2016

2016

R e s ide ntia l This composition is likely to change in the years ahead asCondominium a new Link light rail line is planned to expand across Mercer Island’s north end; connecting the City of Bellevue with the City of Seattle and providing multifamily alternatives close to the metro lines.

Mercer Island has been a seller’s market since July 2014. After bottoming in May 2016 at 1.6 months, the supply ended the year at an annual average of 2.2 months. The median price was $1,235,000, more than two-and-a-half times the King County average. Furthermore, prices were higher year-over-year in 2016 than they were in 2015 by 12.3 percent to 10.9 percent, respectively.

R ealo g ics S otheby's Inter national Realty | rsir. com


36 // C OMMUNIT Y REPORT S //

Houghton | Kirkland $ 1 ,70 0,0 0 0 SO L D

$500K

$400K

$505K

Like other Eastside areas to its east and south, single-family homes and condominiums in

KIRKLAND /B RID LE T RAIL: QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$475K

K

irkland is an affluent community, situated on the eastern shore of Lake Washington, with significant marinas and transient boat access, unlike Bellevue. Google has an expanding development office here. The local public International Community School was ranked third in the state in 2016; and other schools in Kirkland, including Eastside Preparatory School, are SEVP-certified. Kirkland grew substantially in 2011 by annexing the adjacent communities of Finn Hill, Juanita and Kingsgate; absorbing nearly seven square miles, 12,541 housing units and about 32,000 new residents. Downtown Kirkland has multiple tower cranes erecting large in-fill projects like Kirkland Urban which will comprise nearly 1.2 million sq. ft. of commercial and residential development and soon be home to employers like Tableau and Wave.

KIRKLAND /B RID LE T RAIL ANNU AL M E D IAN PRIC E S $598K

KIRKLAND/ BRIDLE T RAI LS

CO N D O M I N I U M

35

R ESI D E N T I A L

30 25 20

$300K

15 $200K

10 5

$100K

0 2014

$0K 2014

2015

2015

2016

2016

R e s ide ntia l Kirkland/Bridle Trails have seen an unbroken seller’s Condominium market for nearly four years. The duration of supply averaged 1.2 days in 2016, 1.6 days in 2015 and 2.1 days in 2014.

In 2016, prices in this distinctive and evolving community were less volatile than in 2015 and, at $725,000, the median price was a bit less than 50 percent higher than the median sale price for King County at large. The year-over-year rate of increase has moderated slightly, from +11.4 percent in 2015 to +10.7 percent in 2016. Realogics Sotheby’s International Realty has its Eastside flagship branch office on the Kirkland waterfront.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 37

Wo o d i n v i l l e $2,962,000 SOLD

Much of Juanita fronts Lake Washington, including a broad stretch with enviable southern exposure dubbed by brokers as the Juanita

$500K

$400K

$580K

Juanita’s annexation to Kirkland in 2011 makes the latter the 13th largest city in Washington State. Woodinville’s much smaller population of 11,782 grew by 4.1 percent from 2010 through 2015.

$600K

$53 5K

T

he area including Juanita (now part of Kirkland), Woodinville and Redmond, north of 116th Street, reaches from the eastern shore of Lake Washington to the eastern edge of King County. In addition to the aforementioned towns, there are lakefront communities (Arrowhead and Holmes Point), golf communities (Bear Creek and Trilogy) and wine country estates (e.g., Hollywood Hill). Woodinville and Inglemoor High Schools in the Northshore School District are both rated top public high schools by U.S. News.

$700K

$680K

JUANITA/ WOO DINV I L L E

WOODINVILLE : QU ART E RLY M E D IAN D AY S ON M ARKE T

WOODINVILLE : ANNU AL M E D IAN PRIC E S 90

CO N D O M I N I U M R ESI D E N T I A L

80 70 60 50 40

$300K

30 $200K

20 10

$100K

0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

Riviera. In 2016, Realogics Sotheby’s International Realty set a new benchmark value here of $5.35 million for a waterfront estate – a price point once thought only to be achieved in Kirkland or West Bellevue enclaves. The monthly supply in this area has been consistently seller-favorable for nearly four years. The duration of inventory averaged 1.1 month in 2016, 1.7 in 2015, and 2.3 in 2014. Over the past 24 months, year-over-year price growth in the Juanita/Woodinville area doubled its pace from last year to +16.0 percent, with the median sale price ending the year 12.7 percent higher than that of King County.

R ealo g ics S otheby's Inter national Realty | rsir. com


38 // C OMMUNIT Y REPORT S //

Redmond $2,988,000 SOLD

The area has been a seller’s market since April 2013 and supply has trended steadily lower. The average duration of inventory was 1.2 months in 2016, 1.6 months in 2015, and 2.2 months in 2013.

$500K

$400K

$570K

From 2010 through 2015, the population of Redmond is estimated to have grown by 11.9 percent.

$600K

$550K

T

he Redmond/Carnation area famously includes the Microsoft campus, but also remarkable communities such as Blakely Woods, Education Hill, Hunter’s Glen and Redmond Ridge. The Bear Creek School and Overlake School, both SEVP private schools certified to admit foreign students, are just northeast of the Redmond city limits. Marymoor Park and Lake Sammamish are popular attractions.

RE D M OND /C ARNAT ION: ANNU AL M E D IAN PRIC E S

RE D M OND /C ARNAT ION QU ART E RLY M E D IAN D AY S ON M ARKE T

$700K

$668K

REDMO N D/ CARN AT I O N

CO N D O M I N I U M

30

R ESI D E N T I AL

25

20

15

$300K

10

$200K

5

$100K

0

$0K

2014 2014

2015

2015

2016

2016

Condominium R e sarea ide ntiadid l In 2015, SFR and condominium prices in this distinctive and evolving not advance as markedly as the their counterparts in the rest of King County, rising by only 2.8 percent. However, in 2016, prices were up by 15.3 percent year-over-year, ending the year 31.1 percent higher than the countywide median price.

In addition to east-west connections offered by SR-520, the non-freeway arterials of Redmond Way and NE 8th Street into Kirkland, as well as NE 124th serving Totem Lake and I-405 freeways provide alternative access to job centers. New employers are increasingly choosing Redmond for new campuses, including SpaceX, and the area will likely expand significantly in the coming years.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 39

Clyde Hill $3,000,000 SOLD

$1,903K

$1,800K $1,600K $1,400K $1,200K $1,000K

60

CO N D O M I N I U M R ESI D E N T I AL

50

40

30

$800K 20

$600K

$568K

$200K

$540K

$400K

$505K

Collectively, this area’s monthly supply of singlefamily homes and condos from 2013 through 2015 was on the bleeding edge between balance and conditions favoring sellers, approaching

WE ST B E LLE VU E /SAT E LLIT E S: QU ART E RLY M E D IAN D AY S ON M ARKE T

$2,000K

$1,419K

N

WMLS Area 520 includes not only West Bellevue, but also its “satellites:” the affluent enclaves of Clyde Hill and Medina and the even more privileged neighborhoods of Yarrow Point and Hunts Point. Of these communities, Hunts Point, grew by 11.2 percent from 2010 through 2015 while the rest grew by 8.0 to 8.7 percent. St Thomas School, an SEVP private school, is located in Medina and Bellevue High School, ranked third in the state and 160th in the nation by U.S. News, is also located in this area. Fortune 500 company Expedia is currently headquartered downtown but will be moving to Seattle’s Interbay neighborhood by 2019. Amazon has recently announced expansion into downtown Bellevue.

WE ST B E LLE VU E /SAT E LLIT E S: ANNU AL M E D IAN PRIC E S

$1,750K

BELLEVU E WEST O F I - 4 0 5

10

0 2014

$0K 2014 Condominium

2015 Res idential

2015

2016

2016 Condominium

R e s ide ntia l

balance in the early summer of 2015; but since March 2016, it has remained a seller’s market. Months in inventory averaged 2.8 in 2016, 3.3 in 2015, and 3.1 in 2014. This area is comprised of highly desirable neighborhoods of very limited size with, atypically, high variability in prices among properties. The 2016 median sale price of $1,257,000 for SFRs and condominiums was 157.6 percent higher than the King County median. Even at these premium prices, Bellevue West witnessed a third consecutive year of double-digit price growth with +16.0 percent year-over-year while the median selling price rose by 17.8 percent in 2015. Pricing these properties can be a challenge due to their distinctiveness, so sellers may expect some deviation from the offered price.

R ealo g ics S otheby's Inter national Realty | rsir. com


40 // C OMMUNIT Y REPORT S //

Bellevue $ 1 ,75 0,0 0 0 SO L D

$500K

$800K

$600K

R ESI D E N T I A L

35.00 30.00 25.00

$300K

15.00

$100K

$311K

20.00

$200K

CO N D O M I N I U M

40.00

$400K

$271K

Demand here has been sufficient to drive inventories lower than all other areas on the Eastside. The monthly supply of single-family residences and condos has averaged less than

$700K

$24 4 K

Flanked by Lake Sammamish on the east, residents prefer the combination of the Bellevue School District and lakefront or lake views on the western shore at a fraction of the price of West Bellevue, especially when compared with Lake Washington waterfront.

E AST AND SOU T H B E LLE VU E : QU ART E RLY M E D IAN D AY S ON M ARKE T

$800K

$670K

W

ith an estimated 2015 population of 135,000, Bellevue is the fifth most populous city in Washington State. Once a bedroom community for the city of Seattle, for decades Bellevue has been a city in its own right. This area of Bellevue east of I-405 is home to Interlake and Sammamish High Schools, respectively rated sixth and ninth in the state by U.S. News.

E AST AND SOU T H B E LLE VU E : ANNU AL M E D IAN PRIC E S

$720K

BELLEVU E EAST O F I - 4 0 5

10.00 5.00 0.00 2014

$0K 2014

2015

2015

six weeks with 1.5 months in 2016, 1.3 in 2015, and 0.9 in 2014. Condominium

Res idential

2016

2016 Condominium

R e s ide ntia l

The City of Bellevue and much of the greater Eastside are highly desirable to international homebuyers, especially Chinese. Such buyers are drawn by the access to excellent public and private schools, prospects for capital appreciation (as noted by recent rises in the market), the area’s demographics and cultural offerings. In 2016, East Bellevue’s median sale price of SFRs and condominiums was 28.1 percent above the median for King County as a whole and the 15.3 percent yearover-year gain outpaced that of the county by 2.6 percent.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 41

East Lake Sammamish $1,810,000 SOLD

Although this area comprises rural and exurban communities as well as suburban cities, in 2016, the median sale price east of Lake Sammamish was 47.9 percent higher than that of King County

90

$800K $700K $600K

$730K

Since April 2013, the area has been a consistent seller’s market for single-family residences and condominiums. The duration of supply averaged 1.1 months in 2016, 1.4 in 2015 and 2.1 in 2014.

LAKE SAM M AM ISH: QU ART E RLY M E D IAN D AY S ON M ARKE T

$900K

$695K

N

WMLS Area 540 extends from the eastern shore of Lake Sammamish to the eastern border of King County in the Cascade Mountain Range. It includes Issaquah north of I-90 (where Costco is headquartered), the city of Sammamish, the towns of Snoqualmie and North Bend and the Census-designated place of Fall City. Skyline High School in Sammamish and Mount Si High School in Snoqualmie are among the state’s top-ranked public high schools, according to U.S. News.

LAKE SAM M AM ISH: ANNU AL M E D IAN PRIC E S

$8 25K

LAKE SAMMAM I S H

CO N D O M I N I U M R ESI D E N T I A L

80 70 60

$500K

50

$400K

40

$300K

30 20

$200K

10 $100K 0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

generally. Over the past two years, sellers have enjoyed progressively higher price gains year-over-year: +12.5 percent in 2016 and +10.4 percent in 2015. With convenient access to both I-90 and SR 520, these communities are popular with commuters that work in the city but seek a preferred combination of relatively affordable housing and premier schools. Fortunately, much of the available land supply for additional development is in this area will help ease the ongoing pressures of rising populations in the region.

R ealo g ics S otheby's Inter national Realty | rsir. com


42 // C OMMUNIT Y REPORT S //

Newcastle $3,100,000 SOLD

$500K

$400K

$575K

This region is popular with families given its balance of urban amenities and natural surroundings, including Cougar Mountain Regional Wildland Park, Squak Mountain State Park and Tiger Mountain State Forest. The I-90 connection offers quick access into both Bellevue and Seattle job centers as well as a gateway to the Cascade Mountain Range and Eastern Washington attractions.

ISSAQU AH: QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$456K

N

WMLS Area 500 combines southern Bellevue and the neighborhoods of Issaquah south of I-90 with the towns of Eastgate and Newcastle. Costco, the third-largest retailer in the U.S., is headquartered adjacent to this area on the north side of I-90 in Issaquah. This area includes Newport High School in Bellevue and Issaquah High School—ranked second and twelfth respectively among the top public high schools in the state by U.S. News.

ISSAQU AH: ANNU AL M E D IAN PRIC E S

$517K

EASTSID E / SOUTH O F I - 9 0

25.00

CO N D O M I N I U M R ESI D E N T I A L

20.00

15.00

$300K 10.00 $200K 5.00 $100K 0.00 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

The population of Issaquah grew by 18.6 percent from 2010 through 2015. Newcastle, about a third of Issaquah’s size, grew more slowly at 9.5 percent. The area is a strong seller’s market for SFRs and condos, with supply averaging 1.2 months in 2016, 1.5 months in 2015 and two months in 2014. This year’s 20 percent year-overyear contraction in supply followed last year’s 25 percent contraction. The median selling price was 35.9 percent higher than the King County median and this reflected a 6.1 percent year-over-year gain, higher than that seen in 2015.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 43

Lake Stevens $1,100,000 SOLD

NORTHEAST SNOHOMISH

90

CO N D O M I N I U M

80

R ESI D E N T I AL

70 $400K

60

$300K

$200K

$330K

Having converted to a seller’s market in mid2015, Northeast Snohomish County haltingly contracted throughout 2016. Months in inventory averaged 1.9 in 2016, 2.6 in 2015, and 3.8 in 2014.

$500K

$306K

From 2010 through 2015, the population of Lake Stevens grew by 10.0 percent while Arlington grew by 5.7 percent and Snohomish by 6.3 percent.

$600K

$28 0K

N

ortheast Snohomish County is a primarily rural area wherein some communities are in transition to upscale exurban commuter retreats. These include Snohomish and Lake Stevens; respectively southeast and east of Everett, Granite Falls on the Stillaguamish River and Lochsloy between Lake Stevens and Granite Falls. All these towns are minutes away from the grandeur of the North Cascades.

LAKE ST E VE NS: QU ART E RLY M E D IAN D AY S ON M ARKE T

LAKE ST E VE NS: ANNU AL M E D IAN PRIC E S

50 40 30 20

$100K

10 0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

In this more remote region of Snohomish County, prices will remain below the county median. The preceding two-year trend of price increases exceeding 10 percent was broken this year at +8.3 percent, falling below the countywide rate of +10.4 percent. While many homeowners do commute to job centers in central Puget Sound, mounting traffic is making this a challenge. The area is also popular for retirees seeking attainable price points, larger land holdings and a balance of town and country lifestyles.

R ealo g ics S otheby's Inter national Realty | rsir. com


44 // C OMMUNIT Y REPORT S //

M a r t h a L a k e | Ly n w o o d $463,000 SOLD

SOUTHW EST SNO HO M I S H

60

CO N D O M I N I U M

$500K

R ESI D E N T I A L

50

$300K

$450K

$400K

$4 26K

The many desirable neighborhoods include Brier near the King/Snohomish County Line between Cedar Valley and Bothell, along the coast at Edmonds (where the ferry to Kingston on the Kitsap Peninsula is located), from Woodway in the south up to Picnic Point Park.

EDM ONDS: QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$3 75K

S

outhwest Snohomish County is midway between the exurban communities of Kitsap, Skagit and Island counties—and is scenic and in some cases more affordable, with minimal commuting distance for people who want to escape the city on weekends. From Edmonds, the ferry to Kingston offers the most direct route to Port Gamble on the Kitsap Peninsula and Port Ludlow in Jefferson County.

EDM ONDS: ANNU AL M E D IAN PRIC E S

40

30

20

$200K

10

$100K

0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

Southwest Snohomish County has been a seller’s market for the past four years and has contracted steadily from January 2015 through last spring. There were 1.2 months of supply in 2016, 1.6 in 2015 and 2.5 in 2014. Although the median price in this area was lower than in King County next door, it was also 13.2 percent higher than the Snohomish County median price. At 11.6 percent, price appreciation in Southwest Snohomish County outpaced the county’s +10.4 percent rate of growth.

Schools in this area include Brighton, a K-8 private school in Mountlake Terrace, which is SEVP certified.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 45

Everett $669,000 SOLD

EVERETT/ MU KILT EO

The seventh largest city in Washington State,

$400K

$300K

CO N D O M I N I U M R ESI D E N T I A L

80

$459K

Kamiak High School in Mukilteo is rated 21st in the state by U.S. News.

90 $500K

$439K

There are affluent communities in Mill Creek and the Mill Creek Country Club east of I-5, at any of several neighborhoods branching off of Harbour Point Boulevard from Picnic Point north, through Mukilteo to Front Street where the Clinton ferry docks and along the shore to Everett.

M UKILT E O: QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$4 22K

E

verett is a regional employment center, most notably for Boeing and the U.S. Navy’s Pacific Home Port. While plenty of residents can and do manage the moderately longer commute to Seattle and Eastside King County for work, there are jobs available nearby as well as even greater access to Skagit and Island Counties and recreation in the North Cascades. Mukilteo is the point of embarkation for South Whidbey Island’s Clinton ferry terminal.

M UKILT E O: ANNU AL M E D IAN PRIC E S

70 60 50 40 30

$200K

20 $100K

10 0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

Everett's population grew by 4.8 percent from 2010 through 2015. Mukilteo, one-fifth the size of Everett, added 6.1 percent to its population during the same time period. Everett/Mukilteo saw uninterrupted monthly contractions in the supply of SFRs and condominiums for sale from May 2015 through May 2016. There were less than two months of inventory from January through December of last year. Months of supply averaged 1.3 in 2016, 2.1 in 2015 and 3.0 in 2014. Prices grew steadily and respectably over the past three years, with the pace quickening toward +10 percent annually (at +9.2 percent) but, as this area is considerably farther from the frenetic employment centers to the south, the median price here is $10,000 lower than the Snohomish County median.

R ealo g ics S otheby's Inter national Realty | rsir. com


46 // C OMMUNIT Y REPORT S //

Anacortes $1,020,000 SOLD

A N ACORT ES

ANAC ORT E S: ANNU AL M E D IAN PRIC E S

ANAC ORT E S: QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K 250

CO N D O M I N I U M R ESI D E N T I AL

$500K

$390K

$300K

$3 59K

Anacortes competes with Camano Island as a regional retirement haven. Anecdotally, some officers at Naval Air Station Whidbey, to the south at Oak Harbor, choose to live in Anacortes. The actual numbers are not very large though; less than 300 service members lived here in 2014, or 2.1 percent of the population. Anacortes High School has been named among the top public schools in the state.

$400K

$349K

T

he “Gateway to the San Juans,” Anacortes here comprises not only this historic town on the northern end of Fidalgo Island but also the rest of the island west of the Swinomish Indian Reservation. Buyers in this area are attracted to the new community of Rock Ridge, the traditional living at Old Town Anacortes, Burrows Bay, the San Juan Islands views at Skyline and Biz Point and waterfront access at Dewey Beach and Gibralter.

200

150

100

$200K 50 $100K 0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

The population of Anacortes grew by 4.0 percent from 2010 through 2015. The proportion of SFRs among the housing stock is 80.2 percent. The area has been a balanced market for most of the past 48 months, but spent much of 2016 flirting ever closer to the edge of a seller’s market. Months in inventory for SFRs and condominiums were 3.3 in 2016, 3.9 in 2015 and 5.3 in 2014. Although prices here are considerably lower than in King, Snohomish or Kitsap Counties, the 2015 median price in Anacortes was 40 percent higher than the median price across Skagit County. However, price appreciation here actually fell behind that of the county year-over-year (+8.6 percent to +9.8 percent, respectively).

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 47

Arrowhead | Camano Island $ 976,7 1 8 SO L D

CAMANO ISLAND

C AM ANO ISLAND : QU ART E RLY M E D IAN D AY S ON M ARKE T 140 R ESI D E N T I AL

$500K

120

100

$400K

$301K

$200K

$338K

$300K

$269K

C

amano Island is the second of the two main islands in Island County. The local chamber of Commerce has positioned the island as a retirement haven or vacation retreat. While an island, there is direct vehicular access through Stanwood connecting to I-5 which resolves any dependencies on ferry services.

C AM ANO ISLAND : ANNU AL M E D IAN PRIC E S $600K

80

60

40

20

$100K

0 2014

$0K 2014

2015

2015

2016

2016 R e s ide ntia l

Camano Island residents find their peaceful getaways at Utsalady Bay in the north; at Madrona Beach on the western shore; at Driftwood Shores along Triangle Cove on the island's eastern coast; and southeasterly by South Camano Drive along the banks of the Saratoga Passage. Despite the faraway ambiance, Camano Island is close-in enough to have participated in the market dynamics driving sales nearer to King County.

The island flirted at the edge of seller’s market territory for much of 2016. Months in inventory averaged 3.1 months in 2016, 4.6 months in 2015 and 6.5 months in 2014. Previously reflecting the more volatile market dynamics of exurban areas, median sale prices on Camano Island have convincingly moved upward with consecutive double-digit increases in 2015 (+11.7 percent) and 2016 (+12.5 percent). At $338,000, the median price here is closer to that of adjacent Snohomish County ($365,000) than to that of Island County ($305,000) to which Camano Island belongs.

R ealo g ics S otheby's Inter national Realty | rsir. com


48 // C OMMUNIT Y REPORT S //

Shorewood | Burien $1,905,000 SOLD

BU RIEN/ N O RMANDY PARK

$500K

50.00

CO N D O M I N I U M

45.00

R ESI D E N T I AL

40.00 $400K

35.00

$200K

$363K

$300K

$3 21K

In 2015, the population of Burien was estimated at 50,467, having grown since 2010 substantially through annexation. Normandy Park’s population was estimated at 6,668. Burien/

B U RIE N: QU ART E RLY M E D IAN D AY S ON M ARKE T

$600K

$275K

T

he Burien/Normandy Park area of Southwest King County includes both Burien and upscale Normandy Park as well as the neighborhoods of Seahurst, Shorewood and Three Tree Point. Downtown Burien has been gentrifying for some years. John F. Kennedy Memorial High School in Burien is an SEVP school certified to admit foreign students. SeaTac International Airport offers connections to Asia and worldwide and the corporate headquarters of Alaska Air Group are located beside Angle Lake in the southeast corner of this area. WA SR-509 offers quick access to downtown Seattle, typically without the heavy volumes of traffic experienced on I-5, making this suburban community increasingly attractive.

B U RIE N: ANNU AL M E D IAN PRIC E S

30.00 25.00 20.00 15.00 10.00

$100K

5.00 0.00 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

Normandy Park is a seller’s market; in 2016, the average monthly supply of singlefamily residences and condominiums was 1.8 which was down from 2.2 in 2015 and 3.3 in 2014. The 2016 annual median price of SFRs and condos was $348,000, 21.6 percent higher than in 2015—the highest year-over-year increase among the communities reported here by well over five percentage points—building on an 18.8 percent increase from the preceding year. Sold prices of similar property types in this area were 28.7 percent lower than those throughout King County.

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 49

South Beach | Bainbridge Island $2,900,000 SOLD

$500K

$400K

$647K

Single-family residences and condos on the

80 $600K

$543 K

B

ainbridge Island in Kitsap County includes Port Madison, Rolling Bay and dozens of other small communities as well as the historic town of Winslow, which now features a flagship branch office for Realogics Sotheby’s International Realty. The island’s Bainbridge High School and Eagle Harbor High School are both ranked among the top public high schools in the state by U.S. News. The population is estimated to have increased by 3.5 percent, from 23,025 to 23,840 since 2010. Despite its proximity to Seattle by ferry, Bainbridge Island’s 27.6 square miles available as living space render a population density of only 847 persons per square mile (psm). This is 59 percent less concentrated than Tiburon in California’s San Francisco Bay Area (at 2,065 psm) and even 39 percent less dense than Anacortes in Skagit County (at 1,388 psm). Accordingly, four-fifths of Bainbridge Island’s housing stock remains single-family.

$700K

$615K

BAINBR I D GE I S LAN D

B AINB RID GE ISLAND : QU ART LE RY M E D IAN D AY S ON M ARKE T

B AINB RID GE ISLAND : ANNU AL M E D IAN PRIC E S

CO N D O M I N I U M

70

R ESI D E N T I AL

60 50 40

$300K 30 $200K

20 10

$100K

0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

island have been a seller’s market since January 2015 and monthly supply remained below two months from September 2015 through May 2015. The months in inventory averaged 2.6 in 2016, 1.9 in 2015 and 3.1 in 2014. As in many other exurban locations, prices tend to be more volatile on Bainbridge Island. While the island benefits as a bedroom community to Seattle, growth slowed within the past year. In 2016, the median price rose by 5.2 percent year-over-year; slackening from the double-digit growth in the preceding two years but still 131.1 percent higher than the Kitsap County median. Brokers at Realogics Sotheby’s International Realty suggest that Bainbridge Island, with its renowned schools, attractive commute to downtown Seattle and small-town charm, is primed for appreciation in comparison with alternatives. Its excellent waterfront real estate sells for roughly twenty percent less than King County waterfront property. R ealo g ics S otheby's Inter national Realty | rsir. com


50 // C OMMUNIT Y REPORT S //

Lo fa l l | Po u l s b o $850,000 SOLD

POULSBO

POULSB O: QU ART E RLY M E D IAN D AY S ON M ARKE T

POULSB O: ANNU AL M E D IAN PRIC E S $600K 120

CO N D O M I N I U M R ESI D E N T I AL

$500K

$400K

80

$337K

$200K

$340K

$300K

$28 5K

P

oulsbo on the Kitsap Peninsula is the home of West Sound Academy, one of the SEVP private schools certified to admit foreign students at both the middle and upper school levels. The population of Poulsbo—originally a Native American settlement and later a Scandinavian enclave—is estimated to have grown by 9.1 percent, from 9,200 in 2010 to 10,041 in 2015. The monthly supply of homes for sale started at the low point of 2015, continued to contract through midsummer, then held steady through the year’s end. The average supply of single-family residences and condominiums for sale was 1.7 months in 2016, down from 2.3 in 2015, more than 60 percent tighter than 2014’s duration of 4.5 months.

100

60

40

20

$100K

0 2014

$0K 2014

2015

AN N UAL M EDI AN P RI CE

2015

2016

2016 Condominium

R e s ide ntia l

modest $2,000 year-over-year decline. Prices in Poulsbo were more volatile than those in Kitsap County generally. Poulsbo has been gaining favor with homebuyers as it offers greater affordability, especially along its waterfront, compared to its higher-priced neighbor Bainbridge Island while remaining a short commute across Agate Pass Bridge which links the two communities. It is the gateway to the Olympic Peninsula and remains reasonably proximate to job centers in both downtown Seattle and Bremerton.

Demonstrating the degree to which prices in this market can shift, Poulsbo’s median sale price followed 2015’s 19.0 percent gain with a

R ealo g ics S otheby's Inter national Realty | rsir.com


// C OMMUNIT Y REPORT S // 51

B a y Vi l l a ge | Po r t L u d l ow $849,900 SOLD

PORT LUDLOW

PORT LU D LOW: QU ART E RLY M E D IAN D AY S ON M ARKE T

$400K

$250K

$200K

$3 25K

$300K

$296K

Port Ludlow’s location at the eastern end of Jefferson County, just over the Hood Canal Bridge from Kitsap County, enables it to draw

R ESI D E N T I AL

900 800 700 600 500 400

$150K

300 $100K

200 100

$50K

0 2014

$0K

Given the market drivers in this location, the supply of homes for sale is often out of balance with demand and therefore sellers and their agents need to be especially diligent about pricing and marketing properties. Until 2015, monthly supply provided little guidance to the prospective time on market. However, in the early summer, Port Ludlow moved to a more balanced position. The months in inventory averaged 5.8 in 2016, 7.9 in 2015 and 9.6 in 2014.

CO N D O M I N I U M

1000 $350K

$275K

P

ort Ludlow is an unincorporated community in Jefferson County near the mouth of the Hood Canal, which separates the Olympic and Kitsap peninsulas. The settlement began its transition from the timber industry to a resort community in the 1960s.

PORT LU D LOW: ANNU AL M E D IAN PRIC E S

2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

weekend refugees from Seattle and elsewhere around the Sound. As a result, the median sale price of homes in Port Ludlow exceeded that of Jefferson County at large by 8.3 percent in 2016—unsurprisingly, as so much of the county is comprised of rural areas and wilderness further west. The median price in Port Ludlow outpaced the Jefferson County median by 14.5 percent to the latter’s 11.9 percent year-overyear. Sellers throughout Jefferson County have tended to price properties too high, but prices in Port Ludlow have steadily drawn closer to sellers’ expectations over the past two years. Greater affordability with similar access to residential services, amenities and waterways as Bainbridge Island have made this community popular with retirees.

R ealo g ics S otheby's Inter national Realty | rsir. com


52 // C OMMUNIT Y REPORT S //

San Juan Islands | Orcas Island $10,000,000 ACTIVE

THE SAN JUAN ISLANDS

800

CO N D O M I N I U M R ESI D E N T I A L

700

$300K

$450K

$400K

$4 25K

There are several schools of high quality in the San Juan Islands. Friday Harbor High School and Orcas Island High School are both ranked highly by U.S. News. Spring Street International School in Friday Harbor is an SEVP school with a substantial number of overseas students.

SAN JU AN ISLAND S: QU ART E RLY M E D IAN D AY S ON M ARKE T

$500K

$3 95K

A

lthough a county in themselves, the San Juan Islands are such a comparatively small market that they compare best against similar exurban waterfront areas around Puget Sound. In September 2016, the islands were featured in a special Legacy Homes report by RSIR as they are an ideal location for family compounds of affluent urbanites living in Seattle, the Eastside or Vancouver, British Columbia.

SAN JU AN ISLAND S: ANNU AL M E D IAN PRIC E S $600K

600 500 400 300

$200K 200 $100K

100 0 2014

$0K 2014

2015

2015

2016

2016 Condominium

R e s ide ntia l

whose sales move more slowly than those closer in. However, the duration of sales has declined in recent years. There were 12.1 months in inventory in 2016, 14.2 in 2015 and 17.1 in 2014. Selling prices have also risen more slowly than elsewhere around the Sound, though faster than waterfront competitor Bainbridge Island. The county median price was up by 6.9 percent to $449,500 in 2016.

People come to the islands to escape the city and, for these residents, remoteness is a feature rather than a bother of island living. As noted above, this characteristic makes for a small market

R ealo g ics S otheby's Inter national Realty | rsir.com


// OUR PHILOSOPHY // 53

OUR PHILOSOPHY

R

ealogics Sotheby's International Realty (RSIR) is built upon a foundation of breaking through the status quo to create new conversations for brokers within the markets it serves. With a passion for evolving forward, RSIR fosters a progressive culture to cultivate change and celebrates each agent with a broker-centric business model of award-winning marketing and micro-branding. With an “international” middle name, RSIR represents the best of both worlds through a local and global reach. Given this position, RSIR is responsible for representing the Puget Sound region to an international audience to showcase the amazing lifestyle and potential this area holds. RSIR proudly represents global citizens and is thrilled they’re choosing to make their homes here.

ARTFULLY UNITING EXTRAORDINARY HOMES WITH EXTRAORDINARY LIVES

R ealo g ics S otheby's Inter national Realty | rsir. com


54 // INDEX //

INDEX COUNT Y REPORTS

COMMUNITY REPORTS

20.. .................................................................KING COUNTY

28.. .............................................. BELLTOWN/DOWNTOWN

21.. ............................................................. KITSAP COUNTY

29.. ......................................................... CENTRAL SEATTLE

22.. ...................................................... JEFFERSON COUNTY

30.. ............................................. QUEEN ANNE/MAGNOLIA

23.. .............................................................SKAGIT COUNTY

31.. .................................................. BALLARD/GREEN LAKE

24.. ............................................................. PIERCE COUNTY

32.. ................................................................ WEST SEATTLE

25.. ....................................................SNOHOMISH COUNTY

33.. ............................................................. NORTH SEATTLE

26.. ............................................................ ISLAND COUNTY

34.. ..................................................... SOUTHEAST SEATTLE 35.. ............................................................. MERCER ISLAND 36.. ............................................. KIRKLAND/BRIDLE TRAIL 37.. ................................................JUANITA/WOODINVILLE 38.. ................................................. REDMOND/CARNATION 39.. .............................................. BELLEVUE WEST OF I-405 40.. ............................................... BELLEVUE EAST OF I-405 41.. ......................................................... LAKE SAMMAMISH 42.. ...............................................EASTSIDE SOUTH OF I-90 43.. ............................................. NORTHEAST SNOHOMISH 44.. ............................................. SOUTHWEST SNOHOMISH 45.. ...................................................... EVERETT/MUKILTEO 46.. ..................................................................... ANACORTES 47.. .......................................................... CAMANO ISLANDS 48.. ............................................BURIEN/NORMANDY PARK 49.. ......................................................BAINBRIDGE ISLAND 50.. .......................................................................... POULSBO 51.. ................................................................ PORT LUDLOW 52.. ................................................ THE SAN JUAN ISLANDS

R ealo g ics S otheby's Inter national Realty | rsir.com


// REFERENCES // 55

REFERENCES S&P CoreLogic Case-Shiller, The S&P Corelogic Case-Shiller National Index Extends New High as Home Price Gains Continue, 27 December 2016. (PAGE 5) 1

Matthew Rocco, “Amazon Sees Rapid Job Growth, Plans 100K New U.S. Jobs,” FOXBusiness, 12 January 2017. (PAGE 6) 2

Monica Nickelsburg, “Seattle maintains status as nation’s hottest housing market due to relentless tech job growth,” Geekwire, 27 December 2016. (PAGE 6) 3

Kipp Robertson, “Home Prices Around Seattle May Be Directly Linked with Transit,” MyNorthwest.com, 4 November 2016. (PAGE 8) 4

The statutory supermajority vote requirement for tax increases was declared unconstitutional in a 6–3 decision by the state Supreme Court on February 28, 2013, League of Education Voters v. State (176 Wn.2d 808). (PAGE 11) 5

“An Income Tax in Washington State? Voters in Olympia are Thinking about It,” Seattle Times, 29 October 2016. (PAGE 11) 6

Quoted by Joel Connelly, “Housing levy passes in landslide; viaduct 'promenade' buried,” Seattle Post-Intelligencer, 2 August 2016. (PAGE 12) 7

Axiometrics, “Top 10 Apartment Market Stories of 2016,” https:// www.axiometrics.com/resources/axio-media/blogs/top-10-apartment-market-stories-of-2016-part-2/ (PAGE 13) 8

Henry Meier, “Federal Immigration Agency Proposes New EB-5 Visa Rules,” Los Angeles Business Journal, 17 January 2017. (PAGE 14) 9

R ealo g ics S otheby's Inter national Realty | rsir. com


Than k You! S e att le | B ainbr idge Isl and | Kirk l and Iss a qu a h | Ma dis on Park w w w.rsir.c om Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. An Equal Opportunity Company. If your property is listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully. Each office is Independently owned and operated. Information Deemed Reliable But Cannot Be Guaranteed.

2016/2017 Market Report | Year End & Trends  

In this review of 2016 market activity in the Puget Sound, we explore the markets in seven key counties of Western Washington State: King, P...

2016/2017 Market Report | Year End & Trends  

In this review of 2016 market activity in the Puget Sound, we explore the markets in seven key counties of Western Washington State: King, P...