Page 1

2018/2019 MARKET REPORT YEAR END REVIEW & TRENDS TO WATCH

In this review of 2018 market activity in the Puget Sound, we explore the markets in eight key counties of Western Washington State: King, Pierce, Snohomish, Kitsap, Skagit, Jefferson, Island and San Juan counties.


TABLE OF CONTENTS

Photo Above: 10017 Edgecombe Place Northeast, Bainbridge Island, Washington | SOLD $1,605,000 Photo by Caleb Melvin Front Cover: 909 5th Avenue #PH2, Seattle, Washington | SOLD $2,150,000 Photo by Clarity Northwest


05 ......................................UNRIVALED BRAND PERFORMANCE 06 ...........................................................2018 RETROSPECTIVE 09 .........S&P / CORELOGIC CASE-SHILLER HOME PRICE INDEX 12 .....................................MEDIAN SELLING PRICE BY COUNTY 13 ....................................MEDIAN SELLING PRICE BY ZIP CODE 14 ..........................................COUNTIES IN THE PUGET SOUND 22 .........................COMMUNITIES AROUND THE PUGET SOUND 54 ............................................ADDITIONAL COMMUNITY DATA 56 .................................................................2019 LOOK AHEAD 62 ........................................................INDEX AND RESOURCES 63 .................................WE ARE AGENTS OF THE EXCEPTIONAL

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


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

A

nother year has passed, as have many pivotal milestones for Realogics Sotheby’s International Realty (RSIR), our brand and the local housing market that we serve. After meteoric home price growth in the region throughout 2016 and 2017, the market began to shift by the second half of 2018, spurred by increasing inventory; the fallout from Seattle's adopted (then repealed) "head tax" and the outcome of Amazon's HQ2; ongoing political banter at home and overseas; threats of interest rate increases; and a barrage of self-fulfilling headlines about a declining housing market. Despite the headwinds, our brokers generated an impressive US$1.6 billion in sales volume — the greatest such production on a per-broker basis compared with the top ten largest real estate brands in the Northwest Multiple Listing Service (per Trendgraphix research). Globally, our brand garnered US$112 billion in sales represented by 990 offices in 72 countries and territories with more than 22,500 sales associates. This year also marks the tenth anniversary of RSIR, an ambitious, next-generation brokerage set to serve a global city on the rise. Now, a decade later, with six local branch offices, more than 235 brokers and US$10 billion in active, pending and sold real estate experience, RSIR is a local leader in global real estate. Our acclaimed Research Editor and Data Analyst, William Hillis has assembled a yearover-year performance review of eight key counties and 31 regional markets. We offer these thoughts, as well as trends to watch, as a conversation starter with our experienced brokers who live and work in your neighborhood. Warm regards,

Dean Jones

President & CEO Realogics Sotheby's International Realty

Pictured above: Realogics Sotheby's International Realty Owners Stacy and Dean Jones


// UNRIVALED BR AND PERFORMANCE // 5

Unrivaled Brand Performance Sotheby's International Realty® reported that in 2018 its affiliated brokers and sales professionals achieved more than US$112 billion in global sales volume, the highest annual sales volume performance in the history of the brand. RSIR was among 27 affiliated companies that surpassed US$1 billion in sales volume in 2018. "Experts predicted that 2018 would be a slow year for the global real estate market," said Philip White, president and chief executive officer, Sotheby's International Realty Affiliates LLC. "Despite the forecast, our talented affiliated companies and their sales associates continued to perform at the top of their game to drive a yearover-year sales volume increase that is truly remarkable. We are going to keep the momentum going in 2019 and we will continue to empower the Sotheby's International Realty network by offering innovative products, tools, and research to provide best in class service."

990

72

22,500

GLOBAL OFFICES

COUNTRIES & TERRITORIES

SALES ASSOCIATES

6

235

$1.6B

LOCAL RSIR OFFICES

RSIR SALES ASSOCIATES

RSIR SALES VOLUME

Marketing Innovation 2018 was an impactful year for the brand. Sotheby's International Realty became the first real estate brand to launch and implement a virtual staging augmented reality app, transforming the homebuying and selling experience with the launch of Curate by Sotheby's International Realty®. The brand entered a custom-publishing relationship with The Wall Street Journal / Barron's Group to present RESIDE®, a bespoke luxury lifestyle magazine and turnkey solution to creating a customized branded magazine. In partnership with Inman, an exclusive channel called Leading in Luxury was launched, featuring expert insight from around the network.

31 MILLION

$112B NEW STORY

Sotheby's International Realty Affiliates Global S a l e s Vo l u m e 2 0 1 8

WEB VISITS, SIR.COM

"The Sotheby's International Realty brand has always stood at the forefront of innovation in the industr y, but we recognize that in order to maintain this standard, we need to continue to press for ward." — Kevin Thompson CMO Sotheby's International Realty Affiliates LLC

13% YEAR OVER YEAR INCREASE

The Sotheby's International Realty brand's affiliated companies and sales associates raised nearly US$1 million for New Story, the brand's charitable partner and a certified 501(c)(3) non-profit organization. The funds raised have gone directly to the construction of new homes in Morelos, Mexico for families who lost their homes in the 2017 earthquakes.


6 / / 2018 RETROSPECTIVE //

20 1 8 R ETROS PECTI VE BY W I L L I AM H I L L I S

On the heels of 2018, January 2019 was an eventful month, as several issues that focused our attention in the preceding year were finally resolved. For one, the Alaskan Way Viaduct closure was permanent and signaled a turning of the page; for others—Federal Reserve rate-setting, the U.S.-China trade war, and State supreme court inaction on Seattle’s income tax initiative—the news brought merely another step along an uncertain path.

Changes downtown: the Viaduct and SR-99 tunnel The end of 2018 was followed on January 11th with the permanent closing of the Alaskan Way Viaduct, the elevated roadway along Elliott Bay first opened in 1952. A landmark to some, an eyesore and catastrophic safety hazard to others, the Viaduct’s demolition began the following day. This is the first step toward opening the SR-99 tunnel under downtown, which is scheduled as this report goes to print.1 It will be followed by grand plans for renovating the Seattle waterfront into a parklike setting that will improve livability downtown, enticing

new residents and drawing further condominium investment to the area. Construction is now well underway at NEXUS, SPIRE, and KODA, representing more than $800 million in new condominium supply.

Interest rate uncertainty and Federal Reserve independence In early January 2019, following a year when U.S. President Donald Trump was browbeating the Federal Reserve (using language some interpreted as threatening the independence of the nation’s central bank), Fed Chairman Jerome Powell declared that the Fed is “waiting and watching,” suspending a planned series of interest rate increases in view of a softening economy.2 The result buoyed markets in hopes of forestalling an economic downturn that would weigh heavily on home prices in Seattle and throughout the country. See more about impacts of the Fed’s hesitance in our Look Ahead at the end of this report.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


7 // 2018 RETROSPECTIVE //

U.S.-China rivalry intensifies on trade and more Meanwhile, the simmering trade war between China and the U.S. appeared to cool later in December. In July, in response to retaliation by China against the Trump administration’s more aggressive trade policy, the White House threatened a 10 percent tariff on goods imported from China, including “building supplies, such as plywood and floor panels.” The complete list of goods subject to the tariff would have comprised $200 billion in imports from China, Washington State’s largest foreign trade partner.3 However, by December 1st, a “temporary trade truce” had been reached by Presidents Trump and Xi, under which the U.S. President suspended the planned tariffs until March 1st, 2019, a deadline which has since been waived. Trade talks between the two countries resumed in January 2019, when the senior China trade official, Chinese Vice Premier Liu He, traveled to Washington for direct talks with the White House.4

Federal government gridlock, implications for immigration Meanwhile, the year ended with a federal government shutdown in the U.S., as neither the newly elected House Democratic majority nor the Trump administration would concede to the other on the funding of a border wall. Attitudes have hardened on the question of undocumented immigration, which the economic nationalists supporting the President regard as a tide of illegal aliens that must be held back. Failure to compromise risks collateral damage to longstanding immigration programs: student visas, the EB-5 investor visa, and the H-1B worker visa (although for his part, on January 11th, 2019, the President tweeted an offer of “a potential path to citizenship” for H-1B holders, adding, “We want to encourage talented and highly skilled people to pursue career options in the U.S.”). North of Seattle, voices in Vancouver, British Columbia are being raised against the effects of perceived abuses of student visas and the now-defunct investor visa program in that province. In January, Canadian journalist Douglas Todd reported that Canada hosts eight times more Chinese students per capita than the U.S., suggesting Canada’s educational institutions are more dependent than U.S. colleges on their tuition paid.5

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


8 / / 2018 RETROSPECTIVE //

Political headhunting in Vancouver as Chinese investors flee south Also in January 2019, CBC released findings of a confidential report alleging that over a billion Canadian dollars over seven years had been laundered through British Columbia's casinos as provincial authorities turned a blind eye.6 Anger has been building against B.C. elected officials since the mid-2016 enactment of the foreign buyer transfer tax, as native Vancouverites feel the burden of being priced out of their own communities. In February 2018, B.C. finance minister Carole James announced that the tax would be raised from 15 percent to 20 percent; and that a new “speculator tax” would be applied to “foreign and domestic investors who don’t pay income tax in the province.” This new tax would be levied at 0.5 percent of a property's assessed value in the fall, and would be raised to 2.0 percent thereafter.7 A poll published in March 2018 showed that not only did the tax increase enjoy 82-percent approval from residents, but that 81 percent wished to see the tax imposed outside the City of Vancouver.8 Sensing the political pressure intensifying, Chinese investors have been quietly reducing their exposure to Canadian taxes and regulation by shifting their investments to the Puget Sound region and other U.S. destinations—more about the forward-looking implications of this development in our Look Ahead.

Seattle City Council overreach More than a year after the City of Seattle petitioned it for a direct review, the state Supreme Court declined to take up the King County Superior Court's ruling against Seattle's income tax, instead referring it back to the Court of Appeals.9 Following the initial setback of Judge John Ruhl's decision in December 2017, in May, the Seattle City Council passed an extremely controversial "head tax" on the city's major employers, with the aim of raising funds to resolve the city's festering homelessness. After the ensuing uproar, the Council quickly rescinded the new tax. Despite the near-universal focus on Amazon, those hit hardest by the defunct tax would have been high-volume, low-wage businesses like Dick's Drive-In. In the aftermath of these two losses, three moderate Seattle City Council members have announced their intentions not to run for re-election to the Council later this year: Bruce Harrell, Sally Bagshaw, and Rob Johnson. Both Mike O’Brien and radical Council member Kshama Sawant already face challengers.1⁰ Left to Seattle voters in the fall is whether today's left-leaning council will shift to the right, or as predicted in the Seattle Times, radicalize further.11

Home prices continue to rise despite doubts As recounted in this year’s Case-Shiller analysis, Seattle finally dropped out of the top three leading cities in the country for residential home price increases; and the Seattle Times spent the second half of the year portraying the slackening rate of advance as an outright drop in home values. However, median residential prices actually ended the year three percent higher in King, Pierce, and Snohomish counties combined. Although price gains were smallest among the most desirable Eastside markets, median selling prices remained higher year over year in these towns, in the City of Seattle, and throughout most of Puget Sound.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


9 // S&P C ORELO GIC / CASE-SHILLER HOME PRICE INDEX //

2018 CAS E - S H I L L E R SU M M A RY: WHAT R EAL LY H AS B E E N H A P P E N I N G ?

T

he Puget Sound real estate market started the year where it had left off in 2017, with residential prices in the Seattle metropolitan region continuing to lead the nation on the S&P CoreLogic / Case-Shiller Home Price Index. By the late spring, however, the trajectory began to level off; and while prices were still rising year over year in June, Seattle ceded the top spot on the index to Las Vegas. By December, Seattle had dropped from third to eleventh nationally by the rate of home price increases. It was upon being overtaken by Las Vegas that confusion and misinformation began to take hold.

How the Case-Shiller Index i s computed, and what it mean s The Case-Shiller Index tracks selling prices of resold residential homes (not new construction or condominiums) in the same Metropolitan Statistical Regions analyzed by the U.S. Census. That is, in the case of Seattle, the index tracks selling prices not only in the City of Seattle, but in King, Snohomish, and Pierce counties. Furthermore, as an index, Case-Shiller is a measure of home price increases over a baseline set years ago. For Seattle, the base month is October 2006. Case-Shiller’s publisher, S&P Dow Jones, reports the changes in the index on a monthly and year-over-year basis. What they are reporting are the changes in local prices as a multiple of that baseline price in 2006. Therefore, when S&P Dow Jones reported the decline in Seattle’s advance on the index, they were not reporting a decline in home prices, but rather a slowing rate of advance. It happens that this change in the trajectory of the index coincided with a surge in the supply of homes for sale in our region, as well as the typical late spring peak in home sales. Also, Seattle’s position on the index was initially overtaken by a region—Las Vegas—that had suffered more than most cities during the subprime crisis a decade ago and was still recovering from those losses. From May through the end of the year, as Seattle fell from first place to third on the Case-Shiller Index, home prices here remained buoyant year over year: in the tri-county region, in King County, and within the boundaries of the City of Seattle. Yet in their coverage of the changes in Seattle home selling prices, the local newspaper of record stepped out of their role as reporters, and ended up making their coverage the news.

Did repor ting at the S eattle Times suppress market pr ices? Beginning with the October 30th, 2018 mention of the July Case-Shiller Index release, Seattle Times reporter Mike

Rosenberg portrayed Seattle's monthly results as a cyclical rather than a seasonal home price decline—an error that to this date has not been admitted or retracted by the paper: In fact, just in the past month, Seattle-area home prices dropped more than anywhere else in the country, according to the new Case-Shiller home price index released Tuesday. The Index showed the region's largest monthly drop in home prices since the late stages of the housing bust.12

Seasonality is a normal and familiar pattern in home selling prices. This is why we normally illustrate price changes year over year rather than month by month. In the October 30th article, Rosenberg directly denied the influence of seasonality, speculating that May prices in the region represented the peak in the market cycle, a supposition that he reinforced a week later: In the city of Seattle, the median home price fell to $750,000, down $25,000 in one month and down $80,000 from the record set in the spring. That's not a normal seasonal drop — prices in the city actually went up during those time frames last year.13

Historically, the median residential price in the city between May and October fell in six of the ten years ending in 2018, including three of the last four; and in 2017, rose by only 50 dollars.

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10 // S&P C ORELO GIC / CASE-SHILLER HOME PRICE INDEX //

Residential Selling Price Trends, Seattle MSA King, Pierce & Snohomish Counties

$550,000

$500,000

$450,000

$400,000

$350,000

$300,000

2018

The Times continued to publish stories of sharply falling prices through the end of the year. By November, home selling prices indeed were declining month by month, particularly in the city of Seattle and in King County. The Times wasn’t the only voice raising doubts about selling prices. In remarks to investors in Seattle-based Redfin investors last summer, CEO Glenn Kelman cited Seattle prices in the context of "waning" homebuyer demand.14 At the outset of the subprime bust, when home prices in the region last plummeted, the decline was first felt in those rural and exurban counties where home-buyers and mortgagors were least economically secure. City-dwellers were more resilient, and the initial effects of the crisis were muted in Seattle and King County. In 2018 however, the situation was inverted, with the steepest drops seen at the center, yet with home prices undiminished in Thurston and Whatcom Counties at the edge.

But w hat ab out tho s e inv e ntor i e s? Some observers have pointed to mounting inventories of homes for sale as indicative of a slowdown, with negative implications for home prices. Again, while inventories and

2017

2016

December

November

October

2015

months in inventory did rise in Seattle and King County from May through December 2018, these effects were far more moderate outside those areas. Secondly, they follow a three-year shortage of housing in the Central Puget Sound region, with median selling times well below three weeks on market in many communities. Moreover, while the traditional boundary between a seller’s and a buyer’s market is six months in inventory, neither Seattle nor King County as a whole reached three months of inventory in any month of 2018.

What' s ne xt for s ell e rs As this report is written, there is widespread agreement that Seattle has entered a new phase for home prices. Yet even expert observers demur to attribute the market’s behavior to fundamentals. “Zillow’s [Director of Economic Research and Outreach, Skylar] Olsen noted that jobs and the economy don’t appear to be the culprit behind the slowing housing market. Instead, ‘for Seattle, the story is much more about expectations coming back down to earth.'"15 Our brokers at Realogics Sotheby’s International Realty know that in most cases, they are not the first source consulted by

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

September

August

July

June

May

April

March

February

January

$250,000

interested parties considering whether to buy or sell. Often those decisions are prompted by important life events: a marriage, childbirth, a promotion, or a death in the family. At other times, a new opportunity, or a perceived risk, prompt households to consider a purchase or sale. Newspapers of record are top influencers of household and business decision-makers in the communities they serve, and their stories inform those decision-makers about opportunities and risk. In 2018, reporting on the housing market weighed more heavily on the risk—and the naysayers have large megaphones. The Seattle Times reports a Sunday edition circulation of 336,363. Its readers are concentrated in King County and the City of Seattle. If it turns out that, whether by error or by mischief, the staff of the Seattle Times spooked the residential market into a premature selloff, the products of that campaign have been losses of tens of millions of dollars to home sellers in the region. Those losses cannot be recovered, but market participants should observe the underlying dynamics and take advantage while prices are still seeking equilibrium.


11 // S&P C ORELO GIC / CASE-SHILLER HOME PRICE INDEX //

MO N THS IN IN V E N TO RY, S I X W EST E R N WAS H I NGTON COUNTI ES King County months in residential inventory, 2007 vs. 2018 12 10 8 6 4 2 0 May Jun

Jul

Aug Sep Oct Nov Dec 2007

Jul

Aug Sep Oct Nov 2007

2018

Skagit County months in residential, 2007 vs. 2018 12 10 8 6 4 2

Jul

Aug Sep Oct Nov Dec 2007

Jul

Aug Sep Oct Nov Dec 2007

0 May Jun

Jul

2018

Thurston County months in residential inventory, 2007 vs. 2018 12 10 8 6 4 2 0 May Jun

12 10 8 6 4 2 0 May Jun

2018

Pierce County months in residential inventory, 2007 vs. 2018 12 10 8 6 4 2 0 May Jun

Snohomish County months in residential inventory, 2007 vs. 2018

2018

Aug Sep Oct Nov Dec 2007

2018

Whatcom County months in residential inventory, 2007 vs. 2018 12 10 8 6 4 2 0 May Jun

Jul

Aug Sep Oct Nov Dec 2007

2018

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


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

W H ATC O M $ 3 8 2 ,6 0 0

SA N J UA N $ 5 4 2 ,0 0 0

S K AG I T $ 3 47, 1 0 0 ISLAND $ 3 6 3,0 0 0 SNOHOMISH $ 4 8 4 ,0 0 0 JEFFERSON $ 3 6 5,0 0 0

K I TSA P $ 3 4 5,0 0 0 M AS O N $ 24 1 ,0 0 0

KING $ 6 8 0,0 0 0

G RAYS H A R B O R $ 1 9 0,0 0 0

K I T T I TAS $ 3 3 5,0 0 0 T H U R STO N $ 3 1 3,70 0

P I E RC E $ 3 4 5,0 0 0

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

CHELAN $ 3 5 0,0 0 0

2018

- $200,000 - $300,000 - $400,000 - $500,000 + The median price of single-family

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

homes is shown for each county.


// MEDIAN SELLING PRICE BY ZIP C ODE // 13

98370

98133

+12.48% $435K

+14.34% $829K

+47.88% $515K

98392

+26.56% $305K

+13.49% $650K

+14.35% $1.1M

203

98103

98199

+17.23% $1.038M

+7.80% $1.105M

+2.93% $641.3K

98101* +21.59% $766K

98104*

+6.58% $405K

98144

98106

+12.90% $525K

98168

-1.88% $572.6K

+11.49% $485K

900

98027

+1.34% $645K

98057

+11.27% $858K

+18.18% $455K 169 515

+15.89% $423K

98148

+18.09% $470K

98058

98055 167

+9.96% $494.75K

+8.89% $490K

169 18

181

98031

98198

+6.49% $410K

98032

+12.86% $395K

+12.82% $440K

98038

+10.40% $499K

515

98030 5

167

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

+8.84% $932.1K

98059

405

98188

509

+6.98% $650K

98029

90

98178

+9.28% $399.95K

+15.13% $607.3K

98070

+8.06% $1.135M

+4.27% $1.147M

98056

98166

16 6

98075

+6.73% 98118 $587K +7.08% $605K

+11.22% $560K

98146

+3.07% $840K

98006

98108

+10.11% $765K

+10.19% $995K

+7.06% $895K

90

+9.68% $1.7M

98136

98074

98008

98007

405

98040

+12.95% $814.9K

160

98004

90

+7.16% $750K

+9.05% $632.5K

+13.41% $930K

520

+17.13% 98005 $2.503M +10.09% $1.255M

+4.48% +7.56% $874.5K $3.013M

98116 98126

+5.12% $1.078M

98122 98039

98134*

+13.19% $599.9K

98053 202

98102

+4.76% $1.228M

5

+8.05% $999.5K

+23.23% $1.356M

+15.38% $1.05M

98112 98121*

98052

98033

98105

+6.25% $850K

98109

303

202

L

+8.61% $908.5K

98119

+11.18% $756K

+7.93% $875K

305

+2.41% $849K

405

98115

+7.86% $810K

+5.29% $826K

98077

202

5

98117

98107

+23.81% $910K

98034

+9.05% $689.5K

3

98110

+5.88% $720K

98125

98072

+10.04% $772.5K

98028

98177

98342

522

98011

98155

+6.65% $617.5K

+20.49% $469.9K

18

516

516

2018

- $300,000 - $500,000 - $700,000 - $900,000 +

The median price of single-family homes is shown beneath corresponding zip codes and includes the percentage change from the prior year. *Indicates median price of single-family homes and condominiums.

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


8

14 // C OUNTIES IN THE PUGET SOUND //

KEY COUNTIES IN THE PUGET SOUND

M E D I A N S E L L I N G P R I C E S , S I N G L E - F A M I LY H O M E S $800,000

2016

2017

2018

$700,000

$471,250

$520,000

$484,000 $339,000

$363,000

$314,450

$390,000

$308,000

$345,000

$276,660

$347,100

$277,278

$312,250

$342,000

$365,000

$307,500

$345,000

$285,000

$200,000

$310,000

$300,000

$440,000

$400,000

$542,000

$630,000

$550,000

$500,000

$680,000

$600,000

$100,000 King

Kitsap

Jefferson

Skagit

Pierce

Snohomish

Island

San Juan

North Admiral | Seattle $1,900,000 SOLD

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// KING C OUNT Y REPORT // 15

K IN G COUNT Y

T

he number of residential selling transactions gradually started to decline in the third quarter of 2017, and accelerated in the third and fourth quarters of 2018. The year ended with 11.2 percent fewer home sales than in 2017. For a second consecutive year, both in number and proportion of overall sales, fewer King County condominium units were sold in 2018 (6,885 units, compared with 7,898 in 2017). After steadily shorter market times since 2015, median cumulative days on market in the fourth quarter of 2018 shot to 26 days—a 16-day year-over-year increase— breaking through the 24-day market time last seen in the fourth quarter of 2014. Of King County cities with more than 500 residential sales in 2018, those with the highest average (not median) selling prices were, in order of average price: Bellevue, Kirkland, Sammamish, Redmond, and Woodinville. The 2018 median residential price was $680,000 and the compound annual growth rate from 2014 through 2018 was 11.5 percent.

1ST AT 114,000 MORE PEOPLE, SEATTLE IS THIS DECADE'S FASTESTGROWING BIG CITY IN THE U.S.

Medina $ 2 6,75 0,0 0 0 SO L D

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


16 // KIT SAP C OUNT Y REPORT //

KITSAP COUNT Y

T

he quarterly number of residential sales in Kitsap County, which had risen continuously year-overyear since the third quarter of 2011, went flat in the fourth quarter of 2017, and fell throughout 2018. The year ended with 7.4 percent fewer homes sold than in 2017. Home sales in Kitsap County are overwhelmingly residential, with condominium sales comprising only 5.3 percent of the total in 2018. Except in the first quarter, when median cumulative days on market shrank to 19 from 29 in the first quarter of 2017, quarterly market times in 2018 were virtually unchanged from those of the

2 0 1 8 M E DIA N P R IC E F OR SI NG L E - FA M I LY HOM E S

Bainbridge Island $2,000,000 SOLD

$345,000 preceding two years. Prices and market conditions on Bainbridge Island and at Poulsbo are described elsewhere in this report. Among the smaller communities in Kitsap County, residential prices averaged $451,000 for 175 homes at Kingston, $461,000 for 83 homes at Seabeck, and $471,000 for 64 homes at Hansville. The 2018 median residential price was $345,000 with a compound annual growth rate of 9.2 percent from 2014 through 2018.

Bainbridge Island $1,698,000 SOLD

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


17 // PIERCE C OUNT Y REPORT //

P IERCE COUNT Y

P

ierce County, whose quarterly residential sales had increased yearover-year, without interruption from 2011 through 2017, saw a comparatively shallow decline of 4.9 percent in 2018. In proportion to overall home sales in Pierce County, condominium unit sales have gradually increased since 2015. Yet in 2018, residential sales still comprised 93.3 percent of the total. A strong seasonal pattern of market times for closed sales—faster in the second and third quarters, slower in the first and fourth quarters—has held firm in Pierce County while markets elsewhere accelerated. Median cumulative days on market in the fourth quarter of 2018 did not exceed the fourth quarter of 2016 market time. Five Pierce County cities saw more than 200 residential sales in 2018 at average prices above $400,000. In order of average price, those were: Gig Harbor, Edgewood, University Place, Bonney Lake, and Buckley. (There were 195 residential sales at an average price of $604,000 at Lake Tapps.) The 2018 median residential price was $345,000 with a compound annual growth rate from 2014 through 2018 of 10.7 percent.

University Place $870,000 SOLD

THE MEDIAN RESIDENTIAL PRICE IN PIERCE COUNTY WAS $345,000 IN 2018.

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


18 // SNOHOMISH C OUNT Y REPORT //

Everett $1,900,000 SOLD

S N O HO M I S H COUNT Y

I

n the third and fourth quarters of 2018, respectively, Snohomish County residential transactions fell by 0.8 and 0.9 percentage points less than King County sales. For the year, Snohomish County saw 10.0 percent fewer home sales in 2018 than in 2017. Since 2014, condominium sales have annually comprised 18 to 19 percent of all home sales in Snohomish County. Their proportion in 2018 was 18.9 percent.

2 0 1 8 M E DIA N P R IC E I N SNOHOM I SH C OU N T Y

$484,000

did not exceed that of the fourth quarter of 2015 or any preceding quarter in recent years. Of Snohomish County cities with more than 500 residential sales in 2018, the highest average selling prices were, in order of average price: Edmonds, Bothell, Snohomish, Lynnwood, and Lake Stevens. The 2018 median residential price was $484,000 with a compound annual growth rate of 10.5 percent from 2014 through 2018.

Just as in King County, Snohomish County median cumulative days on market expanded to 26 in the fourth quarter of 2018. However, this duration Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

18.9% PROPORTION OF CONDOMINIUM SALES IN SNOHOMISH COUNTY, 2018


// SKAGIT C OUNT Y REPORT // 19

La Conner $ 1 ,75 0,0 0 0 SO L D

SKAG IT COUNT Y

R

esidential selling transactions in Skagit County declined every quarter from the second quarter of 2017 through the end of 2018, at rates ranging from 3.8 percent to 11.0 percent year over year. Annual home sales were 8.9 percent lower in 2018.

SKAGIT COUNTY SAW AN ANNUAL MEDIAN PRICE OF $347,100 IN 2018, UP BY 10.04 PERCENT FROM 2017. Y E A R - O V E R -Y E A R M E D I A N PRICE CHANGE BY COUNTY

In each quarter after the first quarter of 2018, Skagit County homes remained on the market just one day longer than in 2017. Skagit County is primarily rural. Only three towns saw more than 200 residential sales in 2018: Sedro-Woolley, with 328 homes at an average of $324,000; Mount Vernon, with 734 homes at an average of $369,000; and Anacortes, with 412 homes at an average of $566,000. The 2018 median residential price in Skagit County was $347,100, with a compound annual growth rate of 10.1 percent from 2014 through 2018.

2017

San Juan

2018

10.34%

4.23% 7.81% 7.08%

Island Snohomish

10.00%

12.82%

11.33% 12.01%

Pierce

11.23% 11.17%

Skagit Jefferson

11.22%

6.73% 8.77%

Kitsap King

11.29% 14.55%

7.94%

0%

2%

4%

6%

8%

10%

12%

14%

16%

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


20 // ISL AND C OUNT Y REPORT //

I S LAN D COUNT Y

R

esidential sales in Island County were generally flat year over year until the fourth quarter of 2018, when they dropped by 21.6 percent. The year ended with 6.3 percent fewer home sales than in 2017. Condominium units in Oak Harbor comprise about four out of five units sold annually in Island County. Their proportion of overall sales in the county reached 6.3 percent in 2018. Median cumulative days on market in Island County declined year over year in each quarter of 2018, unlike most of the Puget Sound region. The 2018 median residential price was $363,000 with a compound annual growth rate of 8.3 percent from 2014 through 2018.

8.3% COMPOUND ANNUAL GROWTH RATE, 2014 TO 2018

Camano Island $ 1 ,475,0 0 0 SO L D

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// SAN JUAN & JEFFERSON C OUNT Y REPORT // 21

SAN JUA N & J E F F E RSO N COUNT I ES 2 0 1 8 M E DIA N S A L E P R IC E , S A N J UA N I SL A N D

R

esidential transactions on a quarterly basis in San Juan County have not exceeded 100 since the third quarter of 2016, when they reached 107. Such low numbers make it difficult to reliably discern market conditions in these small communities among the county's many islands. Median cumulative days on market in the islands has not contracted to fewer than 46 days, which it reached in the second quarter of 2017. The annual market time settled at a median cumulative days on market of 86 in 2018.

$812,000

Average residential selling prices included $624,000 for 46 homes on Lopez Island, $631,000 for 55 homes at Friday Harbor, $812,000 for another 83 homes elsewhere on San Juan Island, and $882,000 for 106 homes on Orcas Island.

this county have become more irregular, but not shorter than the third quarter of 2018 when the median cumulative days on market was 17. At 38 days, fourth-quarter median cumulative days on market was 16 days shorter year over year.

The San Juan County median residential price was $542,000 with a compound annual growth rate of 7.7 percent from 2014 through 2018.

The Jefferson County 2018 median residential price was $365,000 with a compound annual growth rate of 8.9 percent from 2014 through 2018.

There were 4.5 percent fewer home selling transactions in Jefferson County in 2018 than in 2017. Quarterly market times in

Orcas Island $1,800,000 SOLD

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


22 // C OMMUNIT Y REPORT S //

31

AT A GLANCE

COMMUNITIES AROUND THE PUGET SOUND 2 0 1 8 Y E A R - O V E R -Y E A R M E D I A N P R I C E C H A N G E

Central Seattle

8.32%

Queen Anne/Magnolia

12.05%

North Seattle

6.31%

Ballard/Green Lake

6.88%

West Seattle

11.57%

Southeast Seattle

11.58%

SODO/Beacon Hill

8.55%

Belltown/Downtown*

7.14%

Bellevue West of I-405

12.20%

Kirkland

17.59%

Mercer Island

9.68%

Bellevue East of I-405

6.40%

Redmond

10.48%

Sammamish

6.38%

Issaquah

12.20%

Eastside/South of I-90

4.57%

Woodinville

15.17%

Bothell

10.39%

Kenmore

5.10%

Shoreline

10.53%

Burien

12.44%

Renton

7.85%

Federal Way

6.85%

Bainbridge Island

8.61%

Poulsbo

12.55%

Lynnwood

11.11%

Edmonds

7.69%

Anacortes

16.19%

Everett

13.65%

Camano Island

4.12%

Gig Harbor/Fox Island 0.0%

7.76% 2.0%

7.94% MEDIAN HOME PRICE INCREASE, KING COUNTY

4.0%

6.0%

8.0%

10.0%

12.0%

The metropolitan region comprising the city of Seattle, the Eastside, Snohomish and Pierce counties, led the nation in home price growth for the entire year. In this section, we describe some of the key draws for homebuyers and other features of our 31 key communities

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

14.0%

16.0%

18.0%

20.0%

around the Sound with an in-depth look at statistics from the 2018 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.*Belltown/Downtown value reflects resale condominium statistics for 2018.


// SEAT TLE • C OMMUNIT Y REPORT S // 23

Broadmoor | Seattle $ 7, 0 0 0 , 0 0 0 S O L D

C ENT RA L SEATT LE C E N T R A L S E AT T L E : MEDIAN SALES PRICES $1,200,000

$400,000

2014

2015

$989,902

$775,000

$696,500

$600,000

$675,000

$800,000

Quarterly numbers of residential homes sold in Central Seattle were lower year-over-year in all but the second quarter of 2018. There were nearly 23 percent fewer sold in the fourth quarter and 11.6 percent fewer over the entire year.

$950,000

$1,000,000 $877,000

T

his area comprises a diverse patchwork of both affluent and middle-income neighborhoods northeast of downtown. Some, including Madison Park, Denny Blaine, and Leschi, offer frontage on Lake Washington; but Capitol Hill and Madison Valley are also included.

$200,000

In both the first and second halves of 2018, fewer condominiums were sold in Central Seattle than in the equivalent periods since the first half of 2014. Condominiums comprised 41.1 percent of 2018 home sales in Central Seattle and 69.2 percent of home sales in Capitol Hill. Central Seattle was one of several areas that saw an end to 15 consecutive quarters of median residential market times shorter than two weeks. Cumulative days on market in the area nearly tripled from the third to the fourth quarter of 2018, from nine days to 26.

$0 2016

2017

2018

2019 Prediction

The median residential price in Central Seattle progressed at a compound annual growth rate of 8.9 percent from 2014 through 2018. This is one of the areas in which Realogics Sotheby's International Realty is forecasting a still higher median price in 2019: to $990,000 from $950,000 in 2018.

There were 31 residential homes sold in Madison Park for an average of $1.83 million, 24 in Washington Park for an average of $2.17 million, and seven in Broadmoor for an average of $3.52 million.

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


24 // SEAT TLE • C OMMUNIT Y REPORT S //

Queen Anne | Seattle $2,525,000 SOLD

QUEEN AN N E / MAGN O L I A

Residential sellers in the twin neighborhoods of Queen Anne and Magnolia drew similar prices for homes they sold in 2018. Those in Magnolia averaged $1.21 million; in Queen Anne, they averaged $1.3 million.

MEDIAN SALES PRICES

$600,000 $400,000

$1,098,549

$946,000

$800,000

$894,100

$1,000,000

$1,060,000

$1,200,000

$782,750

Condominium units comprised 37.8 percent of all homes sold in Queen Anne and Magnolia in 2018, down from 39.5 percent in 2017.

QUEEN ANNE/MAGNOLIA:

$702,506

T

he quarterly number of residential home-selling transactions in Queen Anne and Magnolia fell throughout 2018—but especially in the third quarter, when they dropped by nearly a third. The unit transaction volume ended the year nearly 20 percent lower than in 2017.

$200,000 $0

From 2014 through 2018, the median price of a residential home in Queen Anne and Magnolia advanced at a compound annual growth rate of 10.8 percent, surpassing a million dollars. As in Central Seattle, the price in Queen Anne and Magnolia is forecast to continue upward in 2019. Yet market times here rose even more sharply than in Central Seattle—fully tripling in 2018 from a year earlier, from nine days to 27.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

2014

2015

2016

2017

2018

2019 Prediction


// SEAT TLE • C OMMUNIT Y REPORT S // 25

Bryant | Seattle $ 1 , 6 8 7, 5 0 0 S O L D

NO RT H S E AT T L E N O R T H S E AT T L E : MEDIAN SALES PRICES

$300,000

$575,700

$500,000 $400,000

$520,000

As in Central Seattle, median residential market times in North Seattle in the fourth quarter of 2018 blew through the last ceiling of 12 days set four years before, reaching 18 cumulative days on market. Double-digit markups from listed prices in the first quarter of 2018 had nearly vanished by the end of the year.

$763,666

$700,000 $600,000

$776,000

$800,000

$825,000

$900,000

$680,000

T

he number of residential homes sold in North Seattle fell year over year in each quarter of 2018 but not by more than 13 percent in the third quarter and by only 10.4 percent for the year. Residential sales comprised 81.3 percent of all 2018 homes sales in North Seattle.

$200,000 $100,000 $0

Thirty-six residential homes were sold at Hawthorne Hills for an average of $1.18 million, 52 were sold at View Ridge for an average of $1.3 million, and 62 sold at Laurelhurst for an average of $2.04 million. Homes sold in Maple Leaf, Wedgwood, and Ravenna sold at average prices of $813,000, $890,000, and $969,000, respectively.

2014

2015

2016

2017

2018

2019 Prediction

The median residential price in North Seattle—which climbed at a compound annual growth rate of 12.2 percent annually from 2014 through 2018—is projected to decline by 7.4 percent in 2019.

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


26 // SEAT TLE • C OMMUNIT Y REPORT S //

Sunset Hill | Seattle $ 4 , 3 3 7, 4 5 2 S O L D

BALLAR D/ GREEN L AK E BA L L A R D/G R E E N L A K E : MEDIAN SALES PRICES $900,000

$400,000 $300,000

The median price of a five-bedroom home in Ballard and Green Lake has steadily increased relative to one in North Seattle: from 14.9 percent less in 2015, to 0.2 percent more in 2017, and 5.0 percent more in 2018.

$743,150

$801,625

$200,000 $100,000 $0 2014

An average of $1.04 million was paid for 137 residential homes in Wallingford and 45 in North Beach. Fifty-four residential homes were sold in Sunset Beach for an average of $1.16 million and 17 in Blue Ridge for an average of $1.44 million.

$585,000

$500,000

Here as well as in Central and North Seattle, 15 quarters of blistering market times came to a close. Ballard's median cumulative days on market had been among the region's lowest at just over a week, and finished the fourth quarter of 2018 at 15 days.

$659,950

$700,000 $600,000

$750,000

$800,000

$517,000

A

s in neighboring North Seattle and Queen Anne/ Magnolia, residential home-selling transactions in Ballard and Green Lake fell year over year in each quarter of 2018—but more steeply, by over 20 percent in the first and third quarters. The annual total of these sales ended the year down by 14.3 percent from 2017.

2015

2016

2017

2018

2019 Prediction

Having advanced at a compound annual growth rate of 11.6 percent since 2014, the median residential price in Ballard and Green Lake is forecast to decline by 7.3 percent in 2019.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// SEAT TLE • C OMMUNIT Y REPORT S // 27

North Admiral | Seattle $1,900,000 SOLD

WEST SE AT T L E

As in Queen Anne and Magnolia, median market times in West Seattle reached 27 days in the fourth quarter of 2018—though with the aforementioned slump in the number of sales, there was no statistical impact on the annual median cumulative days on market, which remained at eight days for a fourth straight year. Among the 71 residential purchases at each of Alki and North Admiral in West Seattle, the average residential prices paid were $924,000 and $1.01 million, respectively. For the 14 homes sold on Beach Drive, an average $1.44 million was paid. At Admiral,

$800,000

$300,000 $200,000

$611,250

$605,000

$400,000

$520,000

$500,000

$675,000

$700,000 $600,000

$465,000

More West Seattle condominiums were sold in 2018 (272) than in any year since 2007. Yet condominium sales still comprised just 15.8 percent of all sales in the area last year.

W E S T S E AT T L E : MEDIAN SALES PRICES

$410,000

R

esidential selling transactions declined on a quarterly basis by increasing proportions year over year from the second quarter of 2018 (-6.7 percent) through the fourth quarter (-20.7 percent). The results were 13.3 percent fewer residential sales in 2018 than in 2017. Under these conditions, sellers from the top to the bottom of the price spectrum were driven to mark down prices in the fourth quarter.

$100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

Fauntleroy, and Genesee, selling prices averaged $814,000, $840,000, and $854,000, respectively. The median residential price in West Seattle rose at a compound annual growth rate of 13.3 percent from 2014 to 2018. An annual decline of 9.4 percent is forecast for 2019.

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


28 // SEAT TLE • C OMMUNIT Y REPORT S //

Columbia City | Seattle $629,000 SOLD

SOUTHE AST SEAT T LE

Although residential sales in Southeast Seattle were historically quick from the second quarter of 2015 through the third quarter of 2018, market times were never quite as short as in other parts of the city. Consequently, the fourth-quarter rebound in median cumulative days on market here was "only" double the median market time in the fourth quarter of 2017. In Columbia City, Seward Park, and Mt. Baker, 2018 residential selling prices averaged $747,000, $937,000, and $986,000, respectively.

MEDIAN SALES PRICES $800,000

$300,000 $200,000

$600,523

$499,000

$500,000 $400,000

$600,000

$600,000

$669,500

$700,000

$429,000

Few condominiums are sold in this area. Residential sales comprised 95.8 percent of Southeast Seattle home sales in 2018.

S O U T H E A S T S E AT T L E :

$375,000

A

lthough the number of fourth-quarter transactions fell more sharply in neighboring SODO/Beacon Hill, in Southeast Seattle, there were fewer sales in each quarter of 2018—35.8 percent fewer in the fourth quarter of 2018 and 24.4 percent fewer in 2018 than in 2017.

$100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

of the median price from 2014 through 2018 is the second-fastest run-up in Seattle prices after that of SODO/Beacon Hill.

Southeast Seattle's residential median selling price—which reached $669,500 in 2018—is forecast to retrace in 2019, but not below $600,000. The 15.6-percent compound annual growth rate

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// SEAT TLE • C OMMUNIT Y REPORT S // 29

Beacon Hill | Seattle $870,000 SOLD

SODO/ BEACO N H I L L

SODO/Beacon Hill is historically the doppelganger of the Southeast Seattle market, but without the impact of Lake Washington waterfront homes on prices at the high end. Consequently, market times in both areas increased to a median 19 days in the fourth quarter of 2018. Likewise, both areas saw sellers widely accommodating buyers on price for the first time in years.

MEDIAN SALES PRICES

$300,000 $200,000

$577,219

$585,000

$400,000

$492,000

$500,000

$635,000

$700,000 $600,000

$425,000

After starting the year with higher residential selling transactions year over year, SODO/Beacon Hill's market reversed course to a 43-percent year-over-year decline in the fourth quarter number of sales. Annually, there were 15.5 percent fewer sales in 2018 than in 2017.

S O D O/ B E AC O N H I L L :

$350,000

F

rom 2014 through 2018, the residential selling price in South Downtown (SODO) and Beacon Hill outpaced those of every other area in Seattle, rising at a compound annual growth rate of 16.1 percent—that is, from $350,000 in 2014 to $635,000 in 2018. A 9.1-percent reversal is forecast for 2019.

$100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

The 49 residential homes sold at Georgetown in 2018 averaged $657,000. Eighty residential homes sold in North Beacon Hill averaged $759,000. Homes with smaller bedroom counts tend to be priced more favorably to buyers than their equivalents in Southeast Seattle.

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


30 // SEAT TLE • C OMMUNIT Y REPORT S //

Seaboard Building | Downtown $2,840,000 SOLD

BELLTOW N / DOWN TOW N

Selling prices of re-sold condominium units in Belltown and Downtown have increased at a compound annual growth rate of 12.0 percent annually since 2014. The median selling price in 2018 was $675,000. The Belltown and Downtown area is also undergoing a "condominium comeback," with several exciting projects in the new development pipeline that are scheduled to deliver over the next few years. The 389-unit NEXUS Condominium Tower will be the first to completion and is scheduled for occupancy late 2019. KODA

MEDIAN SALES PRICES $800,000

2014

2015

$300,000 $200,000

$618,047

$400,000

$675,000

$500,000

$525,000

$600,000

$630,000

$700,000

$450,000

Also in the fourth quarter, market times of units listed for resale lingered for a median 52 cumulative days on market, although these units were competing with recent new construction offerings in pre-sales that have not yet opened for occupancy. To entice buyers away from new projects, sellers of existing units sold in the second half of 2018 were compelled to negotiate lower-than-list prices more frequently than seen since 2016.

B E L LT O W N / D O W N T O W N :

$429,000

T

he fourth quarter of 2018 saw fewer than 100 units sold, the least Belltown/Downtown Seattle condominium units sold quarterly since the first quarter of 2015. For the year however, two more units were sold than in 2017.

$100,000 $0 2016

2017

2018

2019 Prediction

has broken ground on a 17-story building with 201 condominium homes in the growing Chinatown-International District and SPIRE will grace the Seattle skyline with occupancy in late 2020 to early 2021. An impressive uptick in presales hit in the fourth quarter of 2018 with the arrival of new projects such as SPIRE and First Light, which combined, outsold resales 2:1 (albeit mostly to international buyers).

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// EAST SIDE: L AKE WASHINGT ON • C OMMUNIT Y REPORT S // 31

Beaux Arts $5,275,000 SOLD

BELLEVU E WEST OF I-405 WEST BELLEVUE: MEDIAN SALES PRICES

$500,000

$1,940,000

$1,000,000

$1,444,500

$1,500,000

$1,761,000

$2,000,000

Market times in this area vaulted by more than 300 percent year over year, from a median cumulative days on market of 14 in the fourth quarter of 2017 to 57 in the fourth quarter of 2018. Longer market times to sale should be factored into listing contracts for 2019.

$2,658,138

$2,500,000

$2,530,044

$3,000,000

$2,255,000

O

n a quarterly basis, residential selling transactions in West Bellevue and its environs were lower year over year throughout 2018, and bottomed in the third quarter at nearly 36 percent fewer sales than seen in 2017. For the year, there were fully 20 percent fewer residential sales in 2018.

$0

This area comprises several distinctive communities west of Bellevue with annual sales in the single digits or fewer. Among these, six residential homes sold in Beaux Arts for an average of $2.57 million, 69 in Clyde Hill for an average of $3.17 million, 33 in Medina for an average of $4.46 million, 23 at Yarrow Point for an average of $4.53 million, and seven at Hunts Point for an average of $6.2 million. 2018 witnessed the top residential sale in the history of the Northwest Multiple Listing Service at $26.75 million, which was represented by Realogics Sotheby's International Realty.

2014

2015

2016

2017

2018

2019 Prediction

In Bellevue proper, residential homes at Enatai, Meydenbauer, and Vuecrest sold for averages of $2.34 million, $2.83 million, and $3.43 million, respectively in 2018. The median residential price in this area soared by 15 percent from 2014 through 2018, and is among those projected to reach new highs in 2019.

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


32 // EAST SIDE: L AKE WASHINGT ON • C OMMUNIT Y REPORT S //

Kirkland $ 2 ,79 9,0 0 0 SO L D

KIRKLAN D

Like other communities in King County, Kirkland saw fewer days on market late in the year; but here, fourth quarter market times had not been so short for so long as in the City of Seattle. The 20 days to sell in the fourth quarter of 2018 was only three days more than in the fourth quarter of 2015 and four days fewer than in the fourth quarter of 2014. However, lengthier market times were sufficient to curtail competitive bidding and force concessions from sellers. The 39 residential homes sold at Holmes Point in 2018 averaged $1.41 million, 67 sold at East of Market averaged $1.59 million, and 31 sold at West of Market averaged $2.2 million. Among

$1,200,000

$400,000 $200,000

$845,575

$952,500

$600,000

$720,800

$800,000

$810,000

$1,000,000

$615,000

Fewer Kirkland condominiums were sold in 2018 than in any year since 2014. However, condominiums continue to comprise a growing share of homes sold—36.4 percent, compared with 35.9 percent in 2017.

KIRKLAND: MEDIAN SALES PRICES

$551,000

E

xcept for a very slight increase in the second quarter, the number of residential sales in Kirkland fell year-overyear throughout 2018, plummeting by 32.8 percent in the first quarter. The result was a 15.2 percent decline for the year.

$0 2014

2015

2016

2017

2018

2019 Prediction

condominiums sold in 2018, 41 sold at Houghton averaged $776,000, 55 at Rose Hill averaged $924,000, and 117 in Downtown Kirkland averaged $1.02 million. At a compound annual growth rate of 14.7 percent from 2014 through 2018, residential selling prices in Kirkland have increased faster than those in any city of King County with the exception of Shoreline (15.3 percent) and Burien (tied at 14.7 percent).

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// EAST SIDE: L AKE WASHINGT ON • C OMMUNIT Y REPORT S // 33

Mercer Island $8,150,000 SOLD

MERCER I S L AN D

$2,000,000

$800,000 $600,000 $400,000

This is a distinctive community with few homes sales annually compared with its neighboring communities around the lake. In addition, only homes in the area of Bellevue West of I-405 are priced more lavishly. The median residential price on Mercer Island was already $1.08 million in 2014, and has grown at a compound annual growth rate of 12 percent since then. For homes selling at these prices, cumulative days on market tends to be less orderly than for those of communities with different dynamics. Although Mercer Island saw the same lengthy fourth quarter of 2018 market time as the cities nearby—29 days—it was just one day longer than fourth-quarter market times in 2014 and 2016, when second-quarter median cumulative days on market were 13 and 10 days, respectively.

$1,782,766

$1,550,000

$1,200,000 $1,000,000

$1,320,000

$1,400,000

$1,700,000

$1,800,000 $1,600,000

$1,199,750

Mercer Island has seen 50 to 55 condominium sales yearly since 2015. Residential sales comprised 84.1 percent of home sales on the Island in 2018.

MERCER ISLAND: MEDIAN SALES PRICES

$1,082,000

T

he decline in residential selling transactions seen on both sides of Lake Washington started in the second quarter of 2018 on Mercer Island. The number of residential homes sold was down by 30 percent in the fourth quarter and by 13.9 percent for the year.

$200,000 $0 2014

2015

2016

2017

2018

2019 Prediction

Mercer Island is positioned to benefit from growth in both downtown Seattle and Bellevue, and will soon offer light rail service to both markets and beyond. Like Bellevue, its preferred school district is a draw, while still considered a sharper value for now than peer markets in Bellevue. Mercer Island's residential selling price is forecast to defy gravity for another year, potentially rising by five percent.

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


34 // EAST SIDE: L AKE SAMMAMISH • C OMMUNIT Y REPORT S //

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

BELLEVUE E AST O F I-405

Here, as elsewhere in King County, market times ended 15 quarters of lows. Median cumulative days on market increased sharply in the fourth quarter of 2018, but to 19 rather than the median 57 days in West Bellevue during that quarter. Offers at lower-than-list prices found more frequent acceptance than seen in years. The 2018 average residential selling price at Wilburton was $1.9 million. In Woodridge it was $1.26 million, and on West Lake Sammamish it was $1.37 million. At Lake Hills, Robinswood, and Phantom Lake, residential selling prices averaged $833,000, $918,000, and $992,000, respectively.

$500,000 $400,000 $300,000

$858,846

$700,000 $600,000

$730,500

$800,000

$878,750

$900,000

$935,000

$1,000,000

$640,000

The number of condominiums sold in Bellevue East of I-405 has increased every year since 2009. Condominiums comprised 43.3 percent of all homes sold in this area in 2018.

EAST BELLEVUE: MEDIAN SALES PRICES

$583,000

D

espite a brief uptick in the second quarter of 2018, the number of residential homes sold in Bellevue East of I-405 was lower throughout 2017 and 2018, leading to consecutive year-over-year declines of 12.9 percent and 10.3 percent, respectively.

$200,000 $100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

From 2014 through 2018, the median price paid in Bellevue East of I-405 rose at a compound annual growth rate of 12.5 percent. It is forecast to decline by 8.1 percent in 2019.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// EAST SIDE: L AKE SAMMAMISH • C OMMUNIT Y REPORT S // 35

Redmond $1,251,000 SOLD

REDMO N D

The regional slowdown in market times in the fourth quarter of 2018 tripled Redmond's quarterly median cumulative days on market, nearly returning it to where it was in the fourth quarter of 2014. Above the median selling price, this protraction of market times impacted sellers' accommodation of buyers to a greater degree than seen since 2014. At Education Hill, 236 residential homes were sold in 2018 at an average price of $1.1 million. Average prices of $1.12 million were paid for 79 homes at Union Hill, $1.18 million for 36 homes at English Hill, and $1.4 million for ten homes at Novelty Hill.

$1,200,000

$400,000

2015

$879,666

2014

$965,000

$600,000

$748,925

$800,000

$873,500

$1,000,000

$670,000

Fewer condominiums were sold in Redmond than in any year since 2012. Residential homes comprised 73.7 percent of all homes sold in 2018.

REDMOND: MEDIAN SALES PRICES

$650,000

T

here were fewer residential selling transactions in Redmond in all but the third quarter of 2018, when they were effectively flat year-over-year. Down by 11 percent, the annual number of sales here fell for a third consecutive year.

$200,000 $0 2016

2017

2018

2019 Prediction

The median residential selling price in Redmond increased at a compound annual growth rate of 10.4 percent from 2014 through 2018. Prices are forecast to decline by 8.8 percent in 2019.

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36 // EAST SIDE: L AKE SAMMAMISH • C OMMUNIT Y REPORT S //

Sammamish $1,272,950 SOLD

SAMMAM I S H

The median fourth-quarter cumulative days on market was 20 days greater than a year before, and nearly twice that of the fourth quarter of 2015. This market time remained below the peak cumulative days on market from 2014; and interestingly, secondquarter cumulative market times that year were just over a week. Yet buyers in Sammamish ended 2018 in a stronger negotiating position than they had been in 15 quarters, especially at the entry level.

$600,000 $400,000

$1,062,789

$954,840

$800,000

$860,500

$1,000,000

$1,015,715

$1,200,000

$765,000

Condominium sales, which increased from 2015 through 2017, retreated in both number and proportion to levels not seen in four years. Sammamish is not a major condominium market, with residential sales comprising 91.2 percent of all home sales in town.

SAMMAMISH: MEDIAN SALES PRICES

$720,000

T

he number of residential home sales was up by 9.1 percent in the first quarter, but modestly lower year over year through the end of 2018, finishing the year with 9.3 percent fewer transactions than in 2017.

$200,000 $0 2014

2015

2016

2017

2018

2019 Prediction

Continued price growth is forecast in Sammamish, where at a compound annual growth rate of nine percent over the past five years, the median residential price has steadily progressed, but more modestly than in Seattle or any other Eastside city.

Of Sammamish residential homes sold in 2018, there were 56 at Trossachs averaging $1.19 million paid, 43 at Pine Lake averaging $1.24 million, and 88 at The Plateau averaging $1.32 million.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// EAST SIDE: L AKE SAMMAMISH • C OMMUNIT Y REPORT S // 37

Issaquah $1,190,000 SOLD

I SSAQUA H ISSAQUAH: MEDIAN SALES PRICES $1,200,000

Fourth-quarter median cumulative days on market increased from eight days in 2017 to 27 days in 2018. Also, only 13 newconstruction residential homes were sold in the fourth quarter of 2018—fewer than in any quarter since the first quarter of 2014, when ten such homes were sold. In the intervening period, an average of 28 new-construction residential homes were sold quarterly in Issaquah. Average selling prices paid were $796,000 for 51 residential homes at Squak Mountain, $1.4 million for 205 homes in the Issaquah Highlands, and $1.1 million for 32 homes on South Lake Sammamish.

$865,101

$740,573

$400,000

$575,000

$600,000

$640,513

$800,000

Condominium sales in Issaquah peaked in 2016. Fewer units were sold in 2018 than in any year since 2012. However, in proportion to overall home sales in Issaquah, condominiums advanced to 41.3 percent in 2018, from 39.4 percent in 2017.

$958,150

$1,000,000 $854,000

Y

ear over year, residential selling transactions in Issaquah decreased proportionally, quarter by quarter, starting in the fourth quarter of 2017. Down by 30.8 percent in the fourth quarter of 2018, there were altogether 15.9 percent fewer residential sales for the year.

$200,000 $0 2014

2015

2016

2017

2018

2019 Prediction

Residential selling prices in Issaquah were robustly higher from 2014 through 2018, with the median price rising at a compound annual growth rate of 13.6 percent. A decline of 9.7 percent is forecast for 2019. [Note: our analysis of 2018 home sales in Issaquah excludes sales in Mirrormont, although students there are enrolled in the Issaquah School District.]

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38 // EAST SIDE: L AKE SAMMAMISH • C OMMUNIT Y REPORT S //

Newcastle $2,695,000 SOLD

EASTSID E SOUT H OF I-90

Residential sales comprised the lion's share of homes sold in this area (75.5 percent), although there was a greater concentration of condominium units (41.5 percent of home sales) in that portion of Issaquah that the area includes. The protraction of cumulative days on market Eastside South of I-90 was even greater than that seen in West Bellevue. Residential homes lingered on the market for a median 33 days in the fourth quarter of 2018, compared with eight days a year before. Longer fourth-quarter market times were attended by generous accommodation of buyers in order to close sales. Among residential homes sold Eastside South of I-90 in 2018, the

EASTSIDE SOUTH OF I-90: MEDIAN SALES PRICES $1,200,000

$400,000

$908,852

$972,525

$795,000

$600,000

$723,000

$800,000

$930,000

$1,000,000

$675,900

T

his irregularly-shaped area covers the eastern shore of Lake Washington south of I-90, reaching inland south to May Creek and Issaquah-Hobart Road, and east to Exit 25 near Upper Preston. Prices vary widely in this area, much of which is rural. Residential transactions ended 2017 substantially higher year-over-year, but started to decline in the second quarter of 2018. By the end of the fourth quarter, the area had given up the previous year's gain in the number of sales and was down 19.3 percent for the year.

$200,000 $0 2014

2015

2016

2017

2018

2019 Prediction

91 sold at Somerset averaged $1.37 million, 81 sold at Lakemont averaged $1.57 million, and 27 sold on Cougar Mountain averaged $1.84 million. Fourteen residential homes sold at Newport Shores for an average of $2.19 million. The median residential selling price in this area advanced at a compound annual growth rate of 9.5 percent from 2014 through 2018. A modest retracement of 6.5 percent is forecast for 2019.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// NORTH KING C OUNT Y • C OMMUNIT Y REPORT S // 39

Wo o d i n v i l l e $1,200,000 SOLD

WOO DINV I L L E

Throughout the year, Woodinville home sellers in the top tier of residential listings by price struggled to close without price reductions. Competition among buyers at lower price bounds faded in the second half of 2018. Yet in recent years, the median price of a five-bedroom home in Woodinville has been gaining on that of comparable homes in Kirkland, from 22.5 percent less, to 15.2 percent less, to 11.1 percent less in 2016, 2017, and 2018, respectively.

$1,000,000

$300,000

$806,090

$500,000 $400,000

$700,000

$700,000 $600,000

$778,000

$800,000

$896,000

$900,000

$605,450

At not more than 80 condominium sales annually in the past five years, Woodinville's condominium market is similar in proportion to that of Sammamish. Residential transactions here comprised 91.4 percent of all home sales in 2018.

WOODINVILLE: MEDIAN SALES PRICES

$562,500

A

long the northern border of King County, as well as further north, the number of homes sold year over year was better sustained by buyers willing to commute further to work. Residential transactions in Woodinville did not decline until the fourth quarter of 2018, and ended the year with just one fewer sale

$200,000 $100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

annual growth rate of 12.3 percent from 2014 through 2018. In 2019, that price is forecast to decline by an even 10 percent.

The median residential price at Woodinville rose at a compound

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40 // NORTH KING C OUNT Y • C OMMUNIT Y REPORT S //

Bothell $900,000 SOLD

BOT HEL L BOTHELL: MEDIAN SALES PRICES

Residential selling prices averaged $818,000 for 14 homes at Norway Hill, $858,000 for 231 homes at Canyon Park, and $933,000 for 12 homes at Bridlewood. The median residential selling price in Bothell advanced at a compound annual growth rate of 10.2 percent from 2014 through 2018. In 2019, the price is forecast to decline by 8.4 percent. [Note: our analysis of 2018 home sales in Bothell excludes sales in

2014

2015

$400,000 $300,000

$551,053

$507,000

After ten quarters of market times between six and eight days, Bothell's median cumulative days on market popped to eleven in the third quarter of 2018. It then surged to 29 in the fourth quarter of 2018, a year-over-year increase of 22 days. Seller markdowns consequently increased.

$500,000 $489,960

In proportion to overall home selling transactions, condominium units comprised 22.2 percent in 2018, nearly unchanged from the 22.4 percent in 2017.

$658,329

$700,000 $600,000

$723,000

$800,000

$654,950

A

seasonally steady number of residential transactions persisted for eleven quarters in Bothell before being broken in the third quarter of 2018 by a 23.7-percent reduction. The year ended with 8.6 percent fewer home sales than seen in 2017.

$200,000 $100,000 $0 2016

2017

2018

2019 Prediction

the Census-designated places of Alderwood Manor and Martha Lake, for which sales are irregularly reported as either Lynnwood or Bothell. Median prices for the two CDPs are reported under "Lynnwood."]

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// NORTH KING C OUNT Y • C OMMUNIT Y REPORT S // 41

Kenmore $768,000 SOLD

KEN MORE

$300,000 $200,000

$672,099

$500,000 $400,000

$600,000

$600,000

$685,000

$700,000

$719,950

$800,000

$544,100

Residential market times in Kenmore increased by nearly four weeks in the fourth quarter of 2018—exceeding fourth-quarter cumulative days on market in 2014, and potentially signaling a return to a more typical annual cycle.

KENMORE: MEDIAN SALES PRICES

$450,000

Y

ear over year, the numbers of residential home sales in Kenmore were lower by 30.6 percent, 34.5 percent, and 26.8 percent in the second, third, and fourth quarters of 2018. The annual decline in transactions from 2017 was 28.2 percent.

$100,000

Kenmore and Woodinville lie west and east of Bothell, respectively, but Kenmore's residential selling prices are more closely aligned with those in the larger city at the center. The median price of a four-bedroom home in Kenmore has steadily increased relative to one in Bothell: from 11.3 percent less in 2015, to 7.4 percent less in 2017, and 5.2 percent less in 2018. For a five-bedroom home, the relative price increases were 11.1 percent less in 2015, to 6.3 percent less in 2017, and 4.2 percent more in 2018.

$0 2014

2015

2016

2017

2018

2019 Prediction

(10.2 percent). It also is forecast to decline in 2019, but by less than seven percent.

At a compound annual growth rate of 12.5 percent from 2014 through 2018, the median residential selling price at Kenmore has outpaced those of Woodinville (12.3 percent) as well as Bothell

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42 // NORTH KING C OUNT Y • C OMMUNIT Y REPORT S //

Shoreline $230,000 SOLD

SHO REL I N E

$300,000 $200,000

$568,779

$479,922

$500,000 $400,000

$570,000

$600,000

$630,000

$700,000

$415,000

While Shoreline's numbers of residential sales have sunk over the past three years, condominium sales have increased. As a result, their proportion of overall sales expanded to 21.8 percent in 2018, having ranged from 15 to 17 percent in the preceding four years.

SHORELINE:

MEDIAN SALES PRICES

$356,000

R

esidential selling transactions in Shoreline peaked in the third quarter of 2015 at 242. There were 43.8 percent fewer sales three years later. The number of residential sales in Shoreline decreased year over year in each quarter of 2018, ending the year 20.8 percent lower than in 2017.

$100,000

Shoreline's residential market times were a median 11 days longer in the fourth quarter of 2018 than a year earlier, but equal to median cumulative days on market in 2014. The low median cumulative days on market in the second quarter that year was nine, compared with seven days to sell in each second quarter of the past four years. Residential selling prices averaged $733,000 for 53 homes in Richmond Highlands, $927,000 for 54 homes at Richmond Beach, and $1.2 million for 14 homes at Innis Arden.

$0 2014

2015

2016

2017

2018

2019 Prediction

first). The median residential price paid here surged at a compound annual growth rate of 15.3 percent in those years. A 9.7-percent retracement is forecast for 2019.

From 2014 through 2018, Shoreline was the second-fastest appreciating market in the region outside of Seattle (Burien was

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// SOUTH KING C OUNT Y • C OMMUNIT Y REPORT S // 43

Burien $689,000 SOLD

BU RIEN BURIEN: MEDIAN SALES PRICES

$50,000

Selling prices averaged $603,000 for 70 residential homes at Shorewood, $690,000 for 53 homes at Seahurst, and $1.01 million for 10 homes at Three Tree Point.

$150,000

$424,420

Median cumulative days on market in the fourth quarter of 2018 fell one day short of the 31-day market time Burien last saw in the fourth quarter of 2014. In some cities, higher fourth-quarter cumulative days on market in 2014 were balanced by rapid sales in the second quarter; but in Burien that year, second- and third-quarter median cumulative days on market were 31 and 25, respectively, raising uncertainty about market times in 2019.

$250,000 $200,000

$310,000

$300,000 $265,000

$350,000

After three years of increases that outpaced Burien's residential sales growth, the number and proportion of condominium sales declined in 2018. Meanwhile, residential sales comprised 87.9 percent of overall home sales in Burien.

$418,000

$450,000 $400,000

$470,000

$500,000

$372,750

T

he numbers of residential homes sold in Burien sank modestly starting in the fourth quarter of 2017, except for a sharp year-over-year reduction of 28.9 percent in the third quarter of 2018. Annually, residential transactions declined by 13.4 percent in 2018.

$100,000

$0 2014

2015

2016

2017

2018

2019 Prediction

At Burien, the median residential price rose more rapidly than in any other city outside of Seattle—at a compound annual growth rate of 15.4 percent, 0.1 percent more than runner-up Shoreline. The median price in both cities is forecast to retrace by 9.7 percent in 2019. [Note: for simplicity, our analysis of 2018 home sales in Burien includes sales in all of White Center. It does not include any parts of Normandy Park, Tukwila or SeaTac.]

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44 // SOUTH KING C OUNT Y • C OMMUNIT Y REPORT S //

Renton $ 4 9 7, 0 0 0 S O L D

RENTO N

$300,000 $200,000

$539,539

$477,500

$400,000

$432,000

$500,000

$515,000

$600,000

$378,000

The number of condominium sales in Renton also declined annually, for the first year since 2014. In 2018, condominium sales comprised 20.4 percent of all home sales in Renton, down from 21.5 percent in 2017.

RENTON: MEDIAN SALES PRICES

$350,000

T

he number of residential sales in Renton has declined yearover-year for seven straight quarters—but by moderate proportions since the first quarter of 2018, when they dropped 34 percent year over year. Transactions have also declined annually since 2015, and by 13.3 percent in 2018.

$100,000

Since 2015, unlike much of Seattle and the more affluent communities around Lake Washington, residential sales in Renton sustained the familiar pattern of longer market times in the first and fourth quarters, with cumulative days on market bottoming in the second quarter of each year. With the market slowdown in the fourth quarter of 2018, median cumulative days on market was back above a month for the first time since 2014.

Average residential prices paid were $540,000 for 234 homes at Fairwood, $600,000 for 280 homes in the Highlands, and $759,000 for 102 homes at Kennydale.

While high-end buyers in Renton took the advantage in negotiations as early as the second quarter of 2018, by the end of the year, buyers at all price points were receiving price concessions from sellers.

Renton's median residential price advanced at a compound annual growth rate of 10.1 percent from 2014 through 2018. Moderate price growth of about five percent is forecast in 2019.

$0 2014

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

2015

2016

2017

2018

2019 Prediction


// SOUTH KING C OUNT Y • C OMMUNIT Y REPORT S // 45

Fe d e r a l Wa y $925,000 SOLD

FE DERAL WAY F E D E R A L WAY: MEDIAN SALES PRICES

Unlike those of other local markets in King County, Federal Way's median cumulative days on market budged upward by only five days in the fourth quarter of 2018. The pattern of quarterly market times has remained practically unchanged since 2015. During this time, entry-level homes for sale here have had no trouble finding buyers. Market fluctuations have tended to impact premium homes more quickly, as indicated by seller markdowns of those listings.

$150,000

$390,000

$289,450

$250,000 $200,000

$261,750

$300,000

$324,950

$350,000

Although the proportion of condominium sales in Federal Way has contracted for three consecutive years, condominiums continue to comprise roughly a fifth of the home selling market by transactions—21.4 percent in 2018.

$409,744

$450,000 $400,000 $365,000

F

ederal Way's steady trend of increasing quarterly home sales year over year ended in the third quarter of 2017, to be followed by six quarters of declines. Still, 2018 saw only 9.1 percent fewer transactions than in 2017.

$100,000 $50,000 $0 2014

2015

2016

2017

2018

2019 Prediction

annual growth rate of 10.5 percent from 2014 through 2018, and is forecast to advance by another five percent in 2019.

Residential selling prices averaged $462,000 for 44 homes at Dash Point, $536,000 for 39 homes at Redondo, $569,000 for 34 homes at Marine Hills, and $633,000 for 19 homes at Adelaide. Federal Way's median residential selling price rose at a compound

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46 // KIT SAP C OUNT Y • C OMMUNIT Y REPORT S //

Bainbridge Island 1 ,72 1 ,0 0 0 SO L D

BAINBR I D GE I S LAN D MEDIAN SALES PRICES

$500,000 $400,000

$839,379

$700,000 $600,000

$740,000

$800,000

$836,500

$900,000

$908,500

$1,000,000

$668,000

There were fewer condominium sales on Bainbridge Island in 2018, and their proportion of overall sales contracted to 21.5 percent— roughly equal to the average for the past five years. Median quarterly cumulative days on market flirted with the 30-day mark several times in recent years, before breaking through to 39 in the fourth quarter of 2018.

BAINBRIDGE ISLAND:

$620,000

T

he 17.8 percent increase in 2017 home sales on Bainbridge Island appears, in retrospect, to have reflected pulledforward demand, as residential selling transactions declined by 8.7 percent in 2018. The number of sales in 2018 was still 5.0 percent and 7.6 percent greater than 2015 and 2016, respectively.

$300,000 $200,000 $100,000 $0

Residential selling prices averaged $1.08 million for 24 homes at Wing Point, $1.1 million for 20 homes at Port Madison, $1.12 million for 22 homes at Fletcher Bay and Crystal Springs, and $1.46 million for 19 homes at Battle Point. The median residential price on Bainbridge Island rose at a compound annual growth rate of 10.0 percent from 2014 through 2018. In 2019, a modest decline of less than eight percent is forecast.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

2014

2015

2016

2017

2018

2019 Prediction


// KIT SAP C OUNT Y • C OMMUNIT Y REPORT S // 47

Po u l s b o $1,850,000 SOLD

POULSBO POULSBO: MEDIAN SALES PRICES $500,000

Poulsbo's home-selling statistics include those of several distinctive small communities between Liberty Bay and Hood Canal. Selling prices among these communities averaged $457,000 for 38 homes at Finn Hill, $556,000 for 21 homes at Lofall, and $724,000 for seven homes at Scandia.

$150,000

2016

$397,941

2015

$386,500

At a median cumulative days on market of 25, Poulsbo's fourth quarter 2018 market time did not exceed that of 2015, as seen in so many other Puget Sound communities. However, similarly to Burien, that new ceiling comes with longer second- and thirdquarter market times (respectively 31 and 21 cumulative days on market) that sellers and their agents should weigh carefully.

$100,000

$250,000 $200,000

$340,500

With conditions similar to those found at Anacortes, Poulsbo is overwhlemingly a residential market. Residential homes comprised 96.7 percent of all homes sold in 2018.

$344,823

$350,000 $300,000

$435,000

$450,000 $400,000

$290,000

A

s a second-home and retirement destination, Poulsbo's residential market has generated a relatively steady pattern of transactions since 2014. Fewer homes were sold year-over-year in 2017 and 2018, but only by single digits: 7.7 percent and 6.3 percent, respectively.

$50,000 $0 2014

2017

2018

2019 Prediction

Poulsbo's median residential price advanced at a compound annual growth rate of 10.7 percent from 2014 through 2018. A retracement of 8.5 percent is forecast for 2019.

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4 8 / / S O U T H W E ST S N OH OM I S H C O U N T Y • C OM M U N I T Y R E P ORT S / /

Ly n n w o o d $513,000 SOLD

LYN N WOO D LY N N W O O D : MEDIAN SALES PRICES $600,000

Condominium selling prices in Lynnwood dropped sharply in the third and fourth quarters of 2018, a result not evident from the higher annual median. While residential selling prices rose at a compound annual growth rate of 10.5 percent from 2014 through 2018, the median condominium price advanced at a compound annual growth rate of 12.4 percent in these years. That trend may be expected to reverse more quickly than the 8.5-percent forecast decline for residential homes in 2019. Lynnwood's median residential selling price of $500,000 in 2018 compares with $575,000 for a residential home in neighboring

$200,000

$500,000

$458,051

$335,000

$300,000

$355,000

$400,000

Lynnwood has emerged as a major condominium market in the region. In 2018, 502 units were sold, comprising 47.2 percent of all homes in Lynnwood: more than Ballard/Green Lake, Queen Anne/ Magnolia, North or West Seattle; and with 95 percent as many condominium sales as Belltown/Downtown Seattle.

$450,000

$500,000

$406,500

F

ar from the declines seen in so many King County communities, quarterly residential transactions at Lynnwood in Snohomish County increased by small increments year-over-year, ending 2018 with 4.5 percent more residential sales than in 2017.

$100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

Alderwood Manor and $625,000 for one at Martha Lake. [Note: our analysis of 2018 home sales in Lynnwood excludes sales in the Census-designated places of Alderwood Manor and Martha Lake, for which sales are irregularly reported as either Lynnwood or Bothell.]

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// S O U T H W E ST S N OH OM I S H C O U N T Y • C OMMUNIT Y REPORT S // 49

Wo o d w a y $3,675,000 SOLD

EDMON DS

The fourth quarter of 2018 saw three full weeks added to the median cumulative days on market at Edmonds, protracting market times to over a month. By the end of the year, buyers were still competing for homes selling at entry-level prices, while sellers of higher-end homes were accepting offers below list. Average prices of $745,000 and $924,000, respectively, were paid for 71 residential homes sold at Meadowdale and 83 at Edmonds Bowl. In neighboring Woodway, the average price paid for 30 residential homes sold in 2018 was $1.31 million.

$300,000 $200,000

$662,640

$499,975

$500,000 $400,000

$585,000

$600,000

$630,000

$700,000

$464,732

Condominium sales comprised 27.7 percent of all home sales in Edmonds in 2018, down slightly from 28.6 percent in 2017.

EDMONDS: MEDIAN SALES PRICES

$400,450

R

esidential transactions in Edmonds hovered near the 2017 figures until the fourth quarter, then dropped by 16.2 percent—a modest decline compared with those to the south in King County. Annually, the numbers of residential homes sold were lower by less than three percent in both 2018 and 2017.

$100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

at Edmonds is forecast to further advance by more than five percent in 2019.

Having already risen at a compound annual growth rate of 12.0 percent from 2014 through 2018, the median residential price

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50 // SNOHOMISH C OUNT Y • C OMMUNIT Y REPORT S //

Anacortes $2,500,000 SOLD

A N ACORT ES ANACORTES: MEDIAN SALES PRICES $600,000

A quarterly pattern of market times in Anacortes is difficult to detect. But although median cumulative days on market has never reached below the 11 days to sell in the second quarter of 2018, fourth-quarter market times since 2015 have been only a few days longer than much of King County saw late last year.

$0

Average residential prices paid were $522,000 for 41 homes at Skyline, $643,000 for 16 homes in Old Town, $653,000 for six homes at Rock Ridge, and $892,000 for five homes at San Juan Passage.

$200,000

2015

$498,450

2014

$451,674

$300,000

$396,000

Demand from retirees, and pied-Ă -terre demand from seaside vacationers, is only sufficient to sustain a small condominium market. Residential sales comprise 90.2 percent of all home sales in Anacortes.

$363,000

$400,000

$429,000

$500,000

$351,500

T

he 20-percent increase in Anacortes residential sales in 2015, followed by a 7.7-percent bump in 2016, may have pulled forward demand in this exurban coastal community. This would partly explain single-digit declines in the number of these sales over the past two years (7.2 percent and 6.4 percent in 2017 and 2018, respectively).

$100,000

2016

2017

2018

2019 Prediction

The median residential price at Anacortes advanced at a compound annual growth rate of 9.1 percent from 2014 through 2018. A decline of 9.4 percent is forecast for 2019.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// SNOHOMISH C OUNT Y • C OMMUNIT Y REPORT S // 51

Everett $670,000 SOLD

EVERET T E V E R E T T: MEDIAN SALES PRICES

In 2018, the average selling price among the 44 residential homes sold in Historic North Everett was $467,000; among the 94 sold at Silver Firs, it was $500,000; and among the 20 sold in Boulevard Bluffs, the average price was $662,000. From 2017 to 2018, selling prices by bedroom count in Everett rose relative to those of similar homes in Lake Stevens, as Everett fell under the eye of Seattle commuters "driving to affordability." Compared with homes in Lake Stevens, prices of three-, four-, and five-bedroom homes in Everett increased their premiums from 4.6

$150,000

$391,438

$349,950

$250,000 $200,000

$283,000

$300,000

$319,250

$350,000

While second-quarter market times remained shorter than a week in 2018, the fourth-quarter slowdown seen in areas of comparable size in King County had not impacted Everett to a similar extent. The median cumulative days on market in the fourth quarter of 2018 did not rise to meet those in the fourth quarter of 2014 or even 2015. Moreover, sellers generally continued to receive offers that matched their listing prices.

$428,500

$450,000 $400,000 $377,050

A

t Everett, only in the second half of 2018 did residential selling transactions begin to fall short of the 2017 tally. By the end of the year, the number of residential sales were lower, but only by 10.1 percent year over year.

$100,000 $50,000 $0 2014

2015

2016

2017

2018

2019 Prediction

percent to 7.0 percent, from 2.3 percent to 4.3 percent, and from 1.6 percent to 14.6 percent, respectively. The median residential price at Everett is forecast to fall back by 8.6 percent in 2019, having risen at a compound annual growth rate of 10.9 percent from 2014 through 2018.

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52 // ISL AND C OUNT Y • C OMMUNIT Y REPORT S //

Camano Island $1,200,000 SOLD

CAMAN O I S L AN D

Pricing a home to sell can be a challenge on Camano Island, where seller markdowns from listed prices have been common, especially above the median price. Camano Island comprises the Census-designated place of Camano, as well as the numerous small, unincorporated communities along its shoreline. Among these communities, average prices paid included $489,000 for 13 residential homes at Elger Bay, $643,000 for 16 homes in Old Town, $615,000 for seven homes at Mabana, and $698,000 for 18 homes at Utsalady.

$250,000 $200,000 $150,000

$385,721

$413,250

$396,880

$350,000 $300,000

$338,000

and Poulsbo, the seasonal pattern of market times here has not been as affected by market fluctuations of the past three years. Median cumulative days on market did gradually contract to 16 in the second quarter of 2018, but the first and second quarter median cumulative days on market have remained in the mid-60s and low-to-mid 40s since 2015.

$450,000 $400,000

$303,500

Camano Island is comparatively remote, and draws substantial numbers of retirees and second-home buyers. Yet unlike at Anacortes

CAMANO ISLAND: MEDIAN SALES PRICES

$269,950

I

n 2018, the number of residential homes sold on Camano Island declined by 8.6 percent, the first annual decline since the 18.8-percent surge in 2015 home sales.

$100,000 $50,000 $0 2014

2015

2016

2017

2018

2019 Prediction

The median residential selling price on Camano Island advanced at a compound annual growth rate of 11.2 percent from 2014 through 2018. A modest retracement of 6.7 percent is forecast for 2019.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// PI E R C E C O U N T Y • C OMMUNIT Y REPORT S // 53

Gig Harbor $1,330,000 SOLD

G IG HAR BO R / FOX IS LA N D

As in Federal Way, the quarterly pattern of median market times at Gig Harbor and Fox Island has not been broken. Here, first-quarter median cumulative days on market has been and continued to be higher than fourth-quarter cumulative days on market in 2018. Market times in all quarters but the fourth were shorter in 2018 than in the past four years. Residential selling prices averaged $792,000 for 80 homes on Fox Island, $809,000 for 61 homes at Canterwood, and $1.03 million for eight homes at Horsehead Bay. At 10.2 percent to 9.1 percent, the compound annual growth rate of Gig Harbor's median residential selling price has outpaced that of Anacortes over the past five years. Due to the mix of bedroom

MEDIAN SALES PRICES

$300,000 $200,000

$539,440

$477,900

$400,000

$439,950

$500,000

$514,975

$600,000

$385,000

Although this area saw no more condominium sales in 2018 (94) than it has in any year since 2004 (99), residential sales still comprised 93.6 percent of all home sales here.

G I G H A R BO R / FOX I S L A N D :

$349,625

I

n Gig Harbor and Fox Island, nine straight quarters of yearover-year increases in home selling transactions ended in the third quarter of 2018. Yet annually, there were only 2.6 percent fewer residential sales than there were in 2017.

$100,000 $0 2014

2015

2016

2017

2018

2019 Prediction

counts sold, since 2015, Gig Harbor has paradoxically outcompeted Anacortes on affordability of two- and four-bedroom homes as well. In 2019, the median residential price paid at Gig Harbor is forecast to further advance by nearly five percent.

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


54 // ADDITIONAL C OMMUNITIES AROUND THE SOUND //

A D D ITION AL CO M M U N I T I ES A ROUND T HE SOUN D

BO N N EY LAKE

D

espite the smallest of declines in the second and third quarters, the number of residential home sales at Bonney Lake did not decline annually in 2018— quite remarkably as they were falling nearly everywhere else. Furthermore, market times in Bonney Lake remained at or near the low 2017 median cumulative days on market in the first, second, and fourth quarters. Residential prices paid averaged $507,000 for 46 homes at Sky Island, $521,000 for 288 homes at Tehaleh, and $523,000 for 16 homes on Inlet Island. Having already increased at a compound annual growth rate of 12.1 percent from 2014 through 2018, the median residential selling price at Bonney Lake is forecast to rise yet another 3.5 percent in 2019.

Bonney Lake $584,000 SOLD

S N O HO M I S H

S

ix quarters of increasing residential transactions in the City of Snohomish, followed by two quarters with no year-over-year change, gave way in 2018 to four quarters of fewer sales year over year. Snohomish ended 2018 with 20.6 percent fewer home sales than in 2017. Snohomish sees a variable number of condominium sales each year, but these have not exceeded 10 percent of all home sales in the city. In 2018, residential sales comprised 92 percent of

the total.

The median market time in Snohomish slowed to a week in the second quarter of 2018, but was protracted to 37 days in the fourth quarter. This was not longer than the fourth quarter of 2014, but perhaps signals a return to normal market times throughout next year. Snohomish $ 2 ,4 0 0,0 0 0 SO L D

The median residential selling price at Snohomish increased at a compound annual growth rate of 10.8 percent from 2014 through 2018.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// ADDITIONAL C OMMUNITIES AROUND THE SOUND // 55

L AK E STEVENS

A

s 2018 began, a pattern of slowing sales had already been in place for three quarters at Lake Stevens. This trend was sustained throughout the year, which ended with 16.5 percent fewer residential selling transactions than in 2017. Condominium unit sales here regularly comprise about 10 to 15 percent of overall home sales. That share was 12.2 percent in 2018.

exceeding that of the fourth quarter of 2014 by a week. Residential selling prices averaged $502,000 for 14 homes at Cedar Downs, $587,000 for 44 homes at Lake Wilderness, and $636,000 for 74 homes at Four Corners. The median residential selling price at Maple Valley advanced at a compound annual growth rate of 9.3 percent from 2014 through 2018. The 2019 price is forecast 7.6 percent lower.

Market times at Lake Stevens maintained a seasonal pattern over the past three years; and although 2018 median cumulative days on market was higher, it did not exceed that of the fourth quarter of 2015. From 2014 through 2018, the median residential selling price at Lake Stevens rose at a compound annual growth rate of 10.8 percent. The price is forecast to retrace by 8.1 percent in 2019.

Lake Stevens $580,000 SOLD

MONROE M a p l e Va l l e y $1,550,000 SOLD

MA PL E VALLEY

I

ncreases in the number of home sales at Maple Valley had been turning lower since 2015, until turning negative in 2018, when they declined by 6.2 percent.

Homes here lingered on the market together with those of closer-in cities in the fourth quarter of 2018, with median cumulative days on market nearly doubling year over year, and

A

fter three straight years of progressively higher increases in the number of residential sales, Monroe's home selling transactions dropped by nearly 30 percent in 2018. Residential time on market remains historically low, at cumulative days on market of 16 for the fourth quarter of 2018 and nine days for the year. Area selling prices in 2018 averaged $538,000 for 175 homes in the town of Monroe. Monroe's median residential price increased at a compound annual growth rate of 12.2 percent from 2014 through 2018, and is forecast to rise by more than five percent in 2019. R ealo g ics S otheby's Inter national Realty | rsir. com


56 // FEDER AL RESERVE AND MONETARY POLICY //

2019

LOOK AHEAD

We project that 25 out of 36 of our profiled communities will see residential prices turn lower in 2019. However, those anticipated results are shaped by several key global drivers, as well as regional conditions that for now remain unsettled. We at RSIR will be watching closely for signals as to which directions our real estate markets may take.

AREA JOB GROWTH CONTINUES

FEDERAL RESERVE

TO STOKE EBULLIENT

MONETARY POLICY

HOUSING DEMAND

M

ortgage interest is a critical factor in home prices and purchasing, and Fed acquiescence to the President’s demands bodes favorably for prices in the year ahead—as long as mortgages continue to be serviced, and bank balance sheets can be sustained. However, contrarian observers warn that the Fed may have met with a liquidity trap, as the benefits of quantitative easing are exhausted with no further room for the bank to maneuver. Such a scenario would likely take months or years to play out, so the effects may not be felt until later in 2019 or in 2020. The last three recessions all took place with three months of the first rate cut after a hiking cycle! In other words, one can argue that it was the Fed's official admission of economic weakness—by cutting rates—that triggered the economic contraction that was gathering pace as a result of higher rates and tighter financial conditions. If that is indeed the case, then the next U.S. recession will begin just a few months after the Fed cuts rates.16

The initial effects of a recession could benefit some cash purchases of properties, as in a flight to quality, sellers needing cash meet with buyers to convert risk-laded liquid assets to real estate. Yet selling prices would fall, as mortgage-financed purchases dry up. Realogics Sotheby's International Realty is not predicting either a recession or a real estate slump, but our clients and customers are advised to be especially mindful of interest rates and business conditions this year. The foregoing argument lays out the conditions under which the following events might occur. It’s the underlying conditions of the business cycle that cause mean reversions in prices, not merely the passing of time or changes in the current trajectory of prices. Without a liquidity crunch, home selling prices may level out, and declines are expected in some locations; but prices will not collapse.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// RISING C ONSTRUCTION C OST S // 57

6-8% ESTIMATED ANNUAL INCREASES IN CONSTRUCTION COSTS

Although members of the Association of General Contractors currently show a lack of concern for higher material costs,17 should the U.S.-China trade negotiations this year fail, with tariffs being imposed on foreign-sourced building materials, higher costs are likely to result. In comparison with an apartment project, which the developer can operate directly and recapitalize over the longer term, a condo developer sells the projects months or years before delivery— the revenue is fixed up front, yet the costs can rise during construction.

RISING CONSTRUCTION COSTS 4.80 4.60 4.40 4.20 4.00 3.80 3.60 3.40 3.20

JUL-19

SEP-19

NOV-19

JAN-19

MAY-19

MAR-19

JUL-18

SEP-18

NOV-18

JAN-18

MAY-18

MAR-18

JUL-17

SEP-17

NOV-17

JAN-17

MAY-17

MAR-17

JUL-16

SEP-16

NOV-16

JAN-16

MAY-16

MAR-16

JUL-15

SEP-15

NOV-15

JAN-15

MAY-15

MAR-15

JUL-14

SEP-14

NOV-14

JAN-14

MAY-14

MAR-14

JUL-13

SEP-13

NOV-13

JAN-13

3.00 MAY-13

Unlike single-family residential development, condominium development competes for materials and equipment with large-scale infrastructure and commercial projects. While condos are likely the smallest segment of new development, they have been competing with a surge of major projects: infrastructure (i.e., Highway 99, waterfront revitalization, and Sound Transit), large commercial projects like the Washington State Convention Center expansion, dozens of large office projects and tech campuses, and a wave of apartment projects which has since peaked.

5.00

MAR-13

T

he same conditions, if this is what's in store, are likely to influence construction costs, as smaller, debt-reliant or lowmargin material suppliers are at risk of being shut down by a withdrawal of liquidity, or in the case of overseas suppliers, by high tariffs. In either case, fewer suppliers would result in higher costs of building materials. Higher interest rates also threaten projects directly through higher financing costs.

The above graph illustrates mortgage interest rates from Freddie Mac Primary Mortgage Market SurveyÂŽ R ealo g ics S otheby's Inter national Realty | rsir. com


58 // AFFORDABILIT Y AND RISING INTEREST R ATES //

AFFORDABILITY AND RISING INTEREST RATES

I

nterest rates have remained historically low throughout the 21st century. They would need to rise sharply in order to meaningfully impact housing affordability. Indeed, the federal income tax deductibility of mortgage interest has been a key factor in affordability by driving home price appreciation. Articles going back decades from across the political spectrum have decried the deduction’s effects, which have tended to benefit wealthier homeowners and developers a good deal more than entry-level homeowners. In October 2017, the National Taxpayer’s Union Foundation reported findings of the Tax Policy Center that: 80 percent of the benefits of the MID flow to homeowners with a household income over $125,000. Most lower-income Americans claim the standard deduction rather than itemizing...At the same time, all Americans who wish to buy a home are harmed by the effects of the deduction. Home prices are inflated, but only some Americans receive a tax deduction to help defray those increased costs.18

Some advocates within the real estate industry have zealously defended the mortgage interest deduction as necessary to sustain home prices. Yet although the deduction was to be reduced under the Trump tax reform that took effect in 2018,19 home prices did not immediately appear to be impacted by the measures taken.20 Historically, the interest rate on a 30-year fixed-rate mortgage bottomed at 3.31 percent in the week of November 21st, 2012, 31 years after peaking in the week of October 9th, 1981 at 18.63 percent. Even today,

rates remain more than 75 percent lower than their 1981 pinnacle, while since that time, U.S. median household incomes nationwide have increased by 222 percent. However, home price increases have measurably exceeded increases in household income. The median home price in November 2012 was 252 percent higher than the price at the October 1981 interest rate peak. Moreover, across the country, home prices have continued to rise, and in Seattle have even accelerated the pace of their advance since interest rates bottomed in November 2012. It might be said that American families have been dollar-cost averaging their home investments since the 1980s. Rather than compute a target price based on a multiple of their annual income, effectively upon a mortgage-financed purchase, they have set monthly payment targets in direct proportion to their monthly income. Therefore, even while interest rates sank, the amount that most homeowners plowed into the family home was never diminished. This is what drove prices higher: the

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t

incentive provided to homeowners by the U.S. tax code to maximize the tax-deductible interest they pay. Now that the 2017 tax reform has settled the matter, further action on the mortgage interest deduction is unlikely in the near term. As the tax reform debate proceeded in 2017, none of the local voices who tend to speak out on housing affordability and upzoning had much to say about the MID—on the contrary, the Seattle Times had published an editorial in 2015 urging that the deduction be preserved.21 Looking ahead, as mortgage interest rates cannot go much lower even if the Federal Reserve elects not to raise them, condominium developers are designing for affordability, offering more efficiently-scaled homes and removing parking and storage from the base features. These are now treated more like an option than a necessity.


// GLOBAL WEALTH SAFE HAVENS // 59

RISK AVERSION CHANNELS GLOBAL WEALTH TOWARD SAFE HAVENS

A

ltough the December 1st, 2018 arrest of Huawei CFO Meng Wanzhou was carried out by Canadian authorities at the behest of U.S. State Department and NSA officials, it came amid seething anti-Chinese resentment in Canada, combined with allegations of money laundering and corruption. Furthermore, Meng’s arrest was followed by a series of detentions of Canadian citizens in China, including one death sentence handed down for drug smuggling. In mid-January, China and Canada each issued warnings to their respective citizens against travel to the other.22 U.S.-China tensions aside, the pressure in Canada is greater, particularly considering the relative size of the three economies—the U.S. population is more than nine times that of Canada, and GDP is eleven times as great. Given the threats in Canada of additional taxes or regulation targeting foreign buyers or absentee owners, as well as tit-for-tat arrests of foreign nationals, Seattle and competing U.S. gateway cities can expect to see more of those buyers who in preceding years might otherwise have been lured to Canadian destinations. The same can be said of foreign buyers in Australia and New Zealand, the latter of which in August 2018 announced a complete ban on purchases of domestic real estate by foreigners.23 In October, the state of Western Australia followed British Columbia, Canada’s lead by raising their foreign buyers’ surcharge from four percent to seven percent.24 Uncertainty and civil unrest in the U.K. and Europe have likewise diminished those countries as magnets for real estate investment from Asia and elsewhere.

Va n c o u v e r, C a n a d a S k y l i n e

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


60 // RENTAL HEADWINDS //

93% ESTIMATED PERCENTAGE OF 27,000 MULTI-FAMILY UNITS IN DOWNTOWN SEATTLE OFFERED FOR RENT VS. SALE AS DELIVERED IN THE CURRENT DECADE

RENTAL HEADWINDS

A

s a record number of apartments get delivered and start leasing up, there is now a supply glut of rental units in the city. Landlords are offering six to eight weeks of concessions on 12-month leases, making renting more attractive. Stories have also emerged of landlords offering extraordinary concessions, such as gift cards and free parking.25 Realogics Sotheby's International Realty had previously seen the thousands of tenants incubating in these towers as being prime targets for condo pre-sales; but if these trends persist, they may stay put if the apartments look more attractive and interest rates rise. Of course, the opportunity cost of renting is missing a chance to buy a home before prices rise further.

2X

NEW CONSTRUCTION UNITS ARE SELLING TWICE AS FAST AS EXISTING RESALES IN DOWNTOWN SEATTLE, URGED ON IN PART BY OVERSEAS BUYERS

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// A BAL ANCING MARKET // 61

A BALANCING MARKET

A

prime consideration that in recent years has driven so many investment dollars into apartment construction has been the Washington State Condominium Act, which imposes heavy liability for construction defects on builders. A bill before the Legislature this year, the Condo Liability Reform bill (SB 5334), offers a chance to reduce the risk to builders by redefining warrantable defects and by limiting the personal liability borne by condo association board members. Combined with the oversupply of apartments, enactment of the bill could shift more development funds into condominium projects.26 The bill passed the Washington State Senate on February 25th, 2019. In King County generally, home selling prices were still higher than in 2017; and although active inventory exceeded 2012 levels from September through November, December saw some moderation. Downtown Seattle saw 468 resale closings in 2018, with a median home price of $675,000 and 39 days on market. That compares to slightly higher resales in 2017 (513), with a median home price of $625,000 and 21 days on market. Downtown Seattle is a thin market and more difficult to discern, yet it seems more sellers are feeling optimistic unloading investment properties due to rental competition, and others are buying into new towers. As new product (units) are opened for occupancy, the last-generation products will hit resales.

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


62 // INDEX AND REFERENCES //

COUNT Y REPORTS

REFERENCES

15.. .................................................................KING COUNTY

1 WSDOT Viaduct Project Display (wsdot.wa.gov)

16.. ............................................................. KITSAP COUNTY

2 Craig Torres and Christopher Condon, "Powell Says Fed is 'Waiting and Watching' With Patience on Rates," Bloomberg, 10 January 2019.

17.. ............................................................. PIERCE COUNTY 18.. ....................................................SNOHOMISH COUNTY 19.. .............................................................SKAGIT COUNTY 20.. ............................................................ ISLAND COUNTY 21.. ............................. SAN JUAN & JEFFERSON COUNTIES

COMMUNITY REPORTS 23.. ......................................................... CENTRAL SEATTLE 24.. ............................................. QUEEN ANNE/MAGNOLIA 25.. ............................................................. NORTH SEATTLE 26.. .................................................. BALLARD/GREEN LAKE 27.. ................................................................ WEST SEATTLE 28.. ..................................................... SOUTHEAST SEATTLE 29.. .......................................................SODO/BEACON HILL 30.. .............................................. BELLTOWN/DOWNTOWN 31.. .............................................. BELLEVUE WEST OF I-405 32.. ........................................................................KIRKLAND 33.. ............................................................. MERCER ISLAND 34.. ............................................... BELLEVUE EAST OF I-405 35.. ........................................................................ REDMOND 36.. ....................................................................SAMMAMISH 37.. ........................................................................ ISSAQUAH 38.. ...............................................EASTSIDE SOUTH OF I-90 39.. ................................................................ WOODINVILLE 40.. .......................................................................... BOTHELL 41.. .........................................................................KENMORE 42.. ...................................................................... SHORELINE 43.. ............................................................................. BURIEN 44.. ........................................................................... RENTON 45.. ..................................................................FEDERAL WAY 46.. ..................................................... BAINBRIDGE ISLAND 47.. .......................................................................... POULSBO 48.. ..................................................................... LYNNWOOD 49.. ........................................................................ EDMONDS 50.. ..................................................................... ANACORTES 51.. .......................................................................... EVERETT 52.. ............................................................CAMANO ISLAND 53.. ............................................. GIG HARBOR/FOX ISLAND

3 Doug Palmer and Adam Behsudi, "Trump targets $200B more Chinese goods for tarrifs," Politico, 10 July 2018. 4 Lingling Wei, "Xi Jinping's Top Trade Aide to Visit U.S. for Talks This Month, Shutdown Permitting," Wall Street Journal, 10 January 2019. 5 Douglas Todd, "Chinese students' river of cash unlikely to dry up," Vancouver Sun, 13 January 2019. 6 Eric Rankin, "B.C. gaming investigators repeatedly warned bosses of 'horrendous' money launering," CBC News, 11 January 2019. 7 Natalie Obiko Pearson, "Vancouver, B.C.'s hot housing market getting more expensive for foreign buyers," The Seattle Times, 20 February 2018. 8 Emma Crawford Hampel, "Most B.C. residents support foreign-buyer tax increase and new speculation tax: poll," Business in Vancouver, 1 March 2018. 9 Associated Press, "State Supreme Court declines to review Seattle income tax ruling," 11 January 2019. 10 Jean Godden, "Running for Seattle City Council? The line forms that way," Crosscut, 10 January 2019. 11 Danny Westneat, "The Seattle City Council may be up for a big shift all right — further to the left," The Seattle Times, 11 January 2019. 12 Mike Rosenberg, "Average Seattle-area home selling for below list price for first time in 4 years," The Seattle Times, 30 October 2018. 13 Rosenberg, "Seattle home prices down $80,000 from peak amid unprecedented spike in homes sitting unsold," The Seattle Times, 6 November 2018. 14 Nat Levy, "Redfin CEO warns of slowing national real estate market, as frustrated buyers are sitting out," GeekWire, 13 August 2018. 15 Levy, "Seattle left off Zillow's hottest housing markets ranking as real estate slowdown continues," GeekWire, 15 January 2019. 16 "Powell May Not Know It Yet, But the Fed Is Now Trapped," ZeroHedge, 14 January 2019. 17 Only five percent of Washington State respondents to the annual business survey by the Association of General Contractors rated building supply costs a leading business risk in 2019, according to the Washington State results of the 2019 Sage Construction Hiring and Business Outlook Survey, Association of General Contractors, 2 January 2019. 18 Andrew Moylan and Andrew Wilford, "Congress Should Repeal the Mortgage Interest Rate Deduction," National Taxpayers Union Foundation blog, 31 October 2017. 19 The deduction for some new, high-end buyers was limited to interest paid on a mortgage debt of $750k or less, while the law also capped at $10k the federal income tax deduction of state and local taxes, including property taxes. 20 "We thought that there would be some impact," Lawrence Yun, the chief economicst for the National Association of Realtors, said [in spring 2018], "but the market is saying, so far, there is not an impact." Jim Tankersley, "The Trump Tax Cuts Were Supposed to Depress Housing Prices. They Haven't," The New York Times, 27 August 2018. 21 Tyler McKenzie, "Don't eliminate the mortgage-interest deduction," The Seattle Times, 17 February 2015. 22 Sarah Zheng, "China issues travel alert telling citizens they could be 'arbitrarily detained' in Canada a day after Ottawa issued similar warning," South China Morning Post, 15 January 2019. 23 Eleanor Ainge Roy, "'Tenants on our own land': New Zealand bans sale of homes to foreign buyers," The Guardian, 15 August 2018. 24 Australian Property Journal, 9 October 2018. 25 Mike Rosenberg, Amid building boom, 1 in 10 Seattle apartments are empty, and rents are dropping," The Seattle Times, 3 January 2019. 26 Dan Bertolet, "Modifications to Washington's condo law could give production a shot in the arm," Sightline Institute, 9 January 2019.

Realo g ics S otheby's Inter national Realty | 2 018/2019 Market Repor t


// WE ARE AGENT S OF THE EXCEPTIONAL // 63

WE ARE AG E NTS O F T H E EXC E PT I ON A L

S

ince 2010, Realogics Sotheby's International Realty has been successfully marketing some of the most distinctive homes in the region. We have established a truly global presence, with innovative technology and unrivaled service. When a home is marketed through the Sotheby’s International RealtyŽ network it immediately begins a journey to worldwide exposure. Our experienced local real estate brokers call the neighborhoods they work in home, many of them serving the community through volunteer work with charities, schools, and neighborhood councils. Our local expertise, global reach, and privileged access to the most qualified buyers in the world ensure the homes we represent garner the exposure they deserve.

RS I R .CO M

@RealogicsSIR

Each office is independently owned and operated.

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Profile for Realogics Sotheby's International Realty

Real Estate Market Report: 2018 Year End Review & Trends to Watch  

Realogics Sotheby's International Realty (RSIR) presents a comprehensive look at the 2018 real estate market with William Hillis, Research E...

Real Estate Market Report: 2018 Year End Review & Trends to Watch  

Realogics Sotheby's International Realty (RSIR) presents a comprehensive look at the 2018 real estate market with William Hillis, Research E...