A COMPREHENSIVE LOOK AT THE PACIFIC NORTHWEST'S EVER-CHANGING RESIDENTIAL REAL ESTATE LANDSCAPE.
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Welcome to the 2023 Forecast Report curated by Realogics Sotheby’s International Realty. This macroeconomic and housing report is a compilation of established Pacific Northwest thought leaders who have analyzed the trends in 2022, considered current trending so far in 2023, and express where they see the local real estate market is heading next.
Inside, you will find insights into our ancillary housing statistics, investment planning, markets to watch, and trends in sustainability and design. We hope this report provides you with valuable information to consider while navigating this ever-changing market and, that this publication creates new conversations that lead to opportunities in 2023 and beyond.
The year 2022 was desultory, with the spring sales season exemplary of the bullish times of the post COVID-era, only to pivot mid-year giving buyers cause for pause and leaving many would-be sellers in a state of apprehension. We witnessed a turbulent end to 2022 with inflation surpassing 8%, mortgage interest rates topping 7%, a volatile stock market, and existing home sales regressing to their lowest levels since the Great Recession. Then, a new year brought new optimism, with a promise for growth and stability.
While we have seen home prices in our region decrease, many of our contributors have predicted them to stabilize, and with increased inventory, decreased pressure, and a trend for lower mortgage interest rates—2023 could very well create a buying opportunity we haven’t seen in a decade. In fact, when homes are priced properly, there is a potential for multiple offers, but it is unlikely to be the same buying frenzy we saw in 2020 and 2021. Year-over-year comparisons will create sensational headlines, but we’re focused on the fundamentals to seize opportunities. Such dynamics make it even more important to work with an experienced real estate broker, backed by the Sotheby's International Realty® brand, who can be relied on as a trusted advisor to support making the right decisions.
At Realogics Sotheby’s International Realty it is our mission to expertly guide our client’s real estate journey to extraordinary results, whether that next address is around the corner or around the world. If you are thinking about making a move in 2023, we’re here to help.
Chief Marketing Officer Realogics Sotheby’s International Realty
Top: RSIR Bellevue Office
EXECUTIVE & SENIOR LEADERSHIP
Dean Jones | President & CEO
Stacia Smith | Chief Sales Officer
Andrea Savage | Chief Marketing Officer
Kevin Walsh | Chief Financial Officer
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Tim McCanta | Eastside Senior Branch Manager
Jessica Peterson | Vice President of Marketing
Natalie Kelly | Vice President of Learning & Development
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Alyssa Morrison
Emily Irby
PROJECT MANAGEMENT
Alexia Brown
GRAPHIC & DIGITAL DESIGN
Ryan Lybeck
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PHOTOGRAPHY
Matthew Gregg
he vast majority of Americans view homeownership as living the American Dream. For most, however, realizing this goal faces persistent headwinds with diminishing affordability and a lack of new housing supply across the Puget Sound region. Municipalities, legislators, developers, consumers, and societal trends will have to align to build and support more housing of all kinds, to meet the demand of a population topping 5 million residents by 2050. An imbalance of supply stands against any real prospect of falling home prices, so consumers planning to make a move should focus on the trend lines rather than sensational headlines.
The Mynd 2022 Consumer Insights Report confirmed 78% of people polled believe owning a home is a key life achievement and 65% credit home equity gains as a key factor for building intergenerational wealth. The freedom to choose where and how we live is also a core value of American life, but the options are finite, especially for those with low and moderate incomes. Residential real estate is already pricey in the Northwest, and notwithstanding a moderate price correction underway in 2023 (and a temporary buyer’s market in many areas), the market fundamentals are pointing to higher prices and fewer homes from which to choose before long.
According to The Puget Sound Regional Council (PSRC), the typical rent rate rose 60% and home values skyrocketed 135% in the broader region since stabilizing after the Great Recession (2007-2009). PSRC research shows metro area rents rose from $1,462 to $2,346 from July 2014 to July 2022 while home values more than doubled from $332,500 to $781,600. Some neighborhoods experienced 20% to 30% median price increases between 2021 and 2022 but have since regressed.
Such a rising cost of housing far exceeds the pace of income increases, which means that attaining homeownership is now further out of reach for many. Now with rising mortgage interest rates, a dearth of new for-sale housing, a global and national economic slowdown, high inflation, and the imbalance of supply and demand is working against the American Dream.
The answer is more housing of varied types in all communities, from existing neighborhoods to those on the drawing boards. The PSRC indicates that there is a backlog of approximately 50,000 units to address current housing gaps today. According to Washington Governor Jay Inslee’s budget, the state needs at least one million new homes by 2044—more than four times the units delivered between 2000 and 2015. This trend doesn’t favor home price affordability in the region.
The highest production format and most affordable solution is multi-family housing, whether they are condominiums for purchase, or apartments to rent. In lower-density areas townhomes are also effective in delivering quicker supply, but the median price points tend to be higher. For perspective, 63% of zoning in Seattle is single-family, and suffice it to say, NIMBY (“not in my backyard”) voters have been resistant to proposals for urban up-zoning in preference for the status quo and lower property taxes.
As of the publishing of this report, 2023 was starting to shore up a resurgence of pending sales activity, reversing the downward trends experienced in the second half of 2023. Existing single-family home sales in King, Snohomish, Pierce, and Kitsap counties have posted a 2.4% increase in activity for the first six weeks of the year, compared to the same period in 2022. While that uptick may not seem significant, we are reminded that a year ago, the market was still operating on a sugar high from historically low mortgage interest rates that were less than half of today’s average, and the stock market hadn’t yet begun its steady correction. So, it feels like buyers and sellers have recalibrated, and the housing freeze is thawing.
During a recent survey of Realogics Sotheby’s International Realty agents, 58% of respondents described the current housing market as being in a state of “temporary correction” while another 20% believed this is either “business as usual” or “typical seasonal slowdowns”. A strong majority (64%) believed that the market recovery would be clearly evidenced by Q3-2023, meaning that pressures on supply and demand would begin to bolster increased sales volumes and rising home prices, once again. The bottom will have passed.
What seems clear now, is that a once-upon-a-cycle spring buyer season is upon us in 2023. Patient shoppers will find the best selection of homes priced to sell, with the greatest negotiation power, and when mortgage rates are trending downward (and set up for a future refinancing opportunity ahead). The media will also be proclaiming that the Seattle metro area is “on sale”, highlighting year-over-year declines for the first half of 2023. Meanwhile, agents will report that pent up demand to buy is already stoking the next gold rush for housing—and waiting too long could mean less selection, more competitive offers, and higher prices ahead.
“Pent up demand to buy is already stoking the next gold rush for housing.”
There are some encouraging housing solutions, however. Since 1994, the City of Seattle allows for Accessory Dwelling Units (ADUs) and Detached Accessory Dwelling Units (DADUs) to grant independent living within single-family homes or to be built in backyards. An estimate of more than 3,000 units was added to the supply, which contributes to attainable housing within existing residential neighborhoods.
This alternative housing stock also absorbed some of the demand that would otherwise be directed to the city center, where one-third of all Seattle apartments are located. In 2019, the City of Seattle greatly increased the ability to create ADUs and DADUs, by updating its land use code. The sale of these ADUs and DADUs has been available due to an existing condominium law. However, challenges with lending and potential liability exist, so converting this inventory to meet individual ownership goals has obstacles to overcome.
by Eddie Chang Real Estate Commissioner VP-Elect of Government Affairs at Washington REALTORS® Chair of the East King County Chambers Legislative Coalition Realogics Sotheby’s International Realty Global Real Estate Advisor
The housing market in Washington is facing a crisis as supply and demand problems are leaving many residents struggling to find a home. According to a study by ECONorthwest, Washington ranks dead last in the nation in terms of units per household, leaving a significant gap in the housing market. This gap affects everyone. From first-time homebuyers to those looking to downsize, there is a very limited supply available. However, our legislators are working to address this crisis by introducing bills like HB1110/SB5190, which aim to increase density in cities and shrink the housing gap. They have also introduced bills such as HB1296/SB5290, to help remove certain unnecessary construction costs, which will allow developers to create additional housing supply to meet the growing demand. Using government-assisted programs, non-profit developers like HomeSight are helping by building an affordable co-op, with 68 units of workforce housing provided to homeowners under the 80% area median income. Thanks to government programs and legislation, we can start to bridge the supply and demand gap and make housing more accessible for all.
By embracing these methods, developers can not only meet the growing demand for housing, but also create a better future for the city and its residents while contributing to Seattle’s efforts to achieve its climate and carbon goals.
Urbanism is a planning and development philosophy that’s spanned centuries with higher-density housing, walkability, access to shopping, residential services, and employment centers, as well as immediacy to public spaces and transportation hubs. In many ways, it’s the opposite of the urban sprawl trends that defined many U.S. cities for decades in a flight to the suburbs. This post-World War II building boom occurred when rising incomes converged with the mass production of automobiles, an expanded highway network, and cheap gas leading consumers to exurban rings updated inexpensive land and new, cookie-cutter single-family communities.
Fast-forward 50 years and most American cities were reborn offering a new “live-work-play” lifestyle advantage with either quick or virtually no commuting times, and a greater social experience with a lighter carbon footprint. Personal time and togetherness became more compelling for many as opposed to owning a picket fence in the suburbs and fighting hours of traffic.
Seattle exemplifies such an urban renaissance given that steep population growth had to funnel through and around hills and waterways exacerbating already challenging commuting times. Then, King County legislators adopted the Growth Management Act in 1990 that would combat further sprawl and focus growth to urban targets. This reduced the likelihood of driving further to meet housing affordability.
The City of Seattle approved the Center City Plan in 2006, which rezoned high-rise neighborhoods in downtown Seattle and allowed for taller, narrower buildings with tower spacing modeled after Vancouver, BC, activating many infill sites and creating a rush to the counter for building permits. Essentially, this up-zone was the fertilizer that developers needed to grow a bumper crop of vertical villages.
Add to this explosive growth of high-tech companies and other expanding industries in the city center, such as biotech, and tens of thousands of new jobs drew an unprecedented housing boom to downtown Seattle’s increasingly vibrant economic ecosystem.
by Kelly Mann Realogics Sotheby’s International Realty Global Real Estate Advisor
We’ve all heard the phrase “location, location, location”–the original meaning was one special spot, one choice that perfectly embodied where you want to live. In 2023 and beyond, we now find new meaning in this classic real estate adage—it means finding the places that enable you to fulfill your vision for your life, and this increasingly means multiple locations that offer distinctly different experiences.
Uncertainties exist at national and global levels, including heightened financing costs, inflation challenges, and global unrest. Yet at the same time, we are benefiting from newfound clarity because of a global experiment in what works at work—when we need to be with professional colleagues and what environments enable us to be the most productive contributors. We also have clarity about what specific living environments enable us to live our best lives, spend time with the people we care about and have access to activities, locations, adventures, and experiences that have meaning to us.
This clarity has fueled recognition of the important things in life— more time with friends and family, access to vibrant cities and cultures, the value of disconnecting and recharging, and tapping into reflection and inspiration that sometimes only nature can provide. The flight to quality has never been more true—quality time at the office, and the quality of our own experiences.
For its part, Realogics Sotheby’s International Realty (RSIR) is a proud leader in market research, product development, marketing, and sales for new multi-family homes as well as single-family communities across the Puget Sound region. Spawned from a development firm, T. Jones, Inc., the brokerage firm has maintained a front-row seat of development trends over the past 30 years.
The award-winning collective is credited as a catalyst in urban living as well as contributed to progressive projects that delivered many first-of-its-kind offerings to the market. Sometimes that takes the form of single-family homes in a short-platted legacy property, like The Bridges by Urban Development. Other times, it’s selected spot lots for both spec and custom homes throughout preferred Eastside neighborhoods like with JayMarc Homes. Recent success stories also include JADE Condominiums by Terrene Homes, selling out the 136-unit building in The Villages of Totem Lake masterplan in the City of Kirkland. This was the only largescale, for-sale condominium community delivered north of SR-520 in more than a decade, and it’s a demonstration of reurbanism, contributing to a reimagined “lifestyle center” of the former Totem Lake Mall.
RSIR has also been supporting U-LEX at Othello Station in South Seattle. This innovative affordable residential co-op building of 68 units aims to address the missing middle and workforce housing along the light rail transportation network, offering a limited equity opportunity vs. renting. To be eligible, purchasers must have a household income of 80% or less than the area median income by household size and be first-time homebuyers or not have owned a home in the last three years.
Other RSIR projects channel back to the future with new, high-rise condominiums being curated in Seattle’s original residential neighborhoods. This includes Graystone Condominiums on historic First Hill by Daniels Real Estate, a developer known for its restorative work now applying it to this
historic community. Positioned as downtown Seattle’s “Upper Eastside” enclave, the condominium is intentionally not viewed as being a “city center,” but part of a quieter, more nostalgic version of cosmopolitan life.
Another emerging trend is for boutique, ultra-prime condominium estates in premium locales, such as the 37-unit Infinity Shore Club by Vibrant Cities on Alki Beach in West Seattle, or the 10-unit Eight One Hundred Condominiums in Old Bellevue. The latter was so exclusive (and inherently risky given the Washington Condominium Act) that the savvy team at Talon Private Capital created a partnership among the investor-owners who collaborated to receive units in a return on their investment rather than buying into a speculative development.
Also ahead for the Eastside, Innovation Realty Partners will envision the Sammamish Town Center in the City of Sammamish. The largest such “city in a city” in King County planning, the project will comprise more than 90 contiguous acres of redevelopment including local shopping, dining, and entertainment, along with housing for young adults, residents across the income spectrum, and senior citizens. In addition to providing hundreds of new housing options in varying product types and price points, the new lifestyle center will provide open spaces, a community center, and will resolve the “retail leak” of area residents having to commute off the plateau to obtain the products and services they require near their home.
For now, the prospects for future high-profile, for-sale developments in urban centers are few, which makes the existing supply inherently limited and ultimately, valuable. RSIR tracks the development cycles of new condominiums delivered, under construction, and planned in the city of Seattle. This included 12 new, for-sale projects comprising 1,520 units built for occupancy between 2018 and 2022. Of this inventory, 1,152 are sold, representing 76% absorption, with 368 available units remaining.
Top: Graystone
Right: JayMarc Homes
Bottom Right: Eight One Hundred Condominiums
Bottom Left: Infinity Shore Club Condominiums
There’s been a slowdown of new construction that has shined a bright window of opportunity for those in the greater Seattle region still cautiously optimistic about building a custom home in the next 12-24 months. So, what to expect?
It is painfully frustrating not to be able to predict what it will cost to build accurately. JayMarc is happy to report that the pricing from our trade base is finally stabilizing and, in some cases, even trending down. That means those planning to build a custom home with us next year can expect much more accurate pricing and even savings.
JayMarc is efficient when it comes to designing, budgeting, and building homes for our clients. Now not only can we predict the budget more accurately than our fellow builders, but we are optimistic about seeing that the 18-24 month timeline from land purchase to the day a client moves into their custom home is back.
We have clients that have been looking for land to build for years but have yet to be successful. The bidding wars were very fatiguing and price escalation was too much. Now, with the market starting to cool, we have been able to help match land on the NWMLS with clients searching.
The time is aligning to build a custom home now.
Looking forward, there are only five new condominium projects planned in Seattle but just two are actually under construction as of January 2023. There were more projects in the pipeline but several converted to apartment uses, a few canceled outright, and others deferred groundbreaking until further notice. Only 729 units will be delivered in 2023 and 2024 combined, of which 399 units remain available for presale. No unit deliveries are slatted in 2025, and this dearth of new supply could extend further unless new projects commence soon—it can take two to three or more years to complete a tower.
Knowing demand can rise much quicker than supply, upward pressure on pricing will again rekindle and a new development cycle is born. Such a reboot is even more likely if mortgage interest rates reverse course as expected, and the market witnesses a migration from renting to buying.
Whatever the trends may be, wherever they may manifest, what’s evident is the Seattle metro area needs more attainable housing to be built. In many ways, the region still suffers from small-town infrastructure and policies that conflict with global city aspirations. There needs to be a paradigm shift in legislation, zoning, the entitlement process, and incentives and resources to pilot new innovations in housing throughout the Puget Sound region if we want the American Dream to be more than fantasy.
Knowing demand can rise much quicker than supply, upward pressure on pricing will again rekindle and a new development cycle is born.
nflation above 8%, volatility in the stock market, the rising cost of borrowing money, public discord, employment concerns, and international conflict are a few of the major influences that drove the housing industry’s transition from a market heavily favoring sellers to one more ideal for buyers.
As a real estate appraiser and consultant for over 47 years, I have actively analyzed the characteristics that create the ebbs and flows of the housing market. During my years in the industry, the Seattle metropolitan area experienced five major corrections and several smaller transitions. In the 1960s through 1990s, employment fluctuations at Boeing drove the housing industry. A typical 10-year period saw a slow market during the first two to three years of a decade, stability over the next two to four years then strong demand and an appreciating market to finish the cycle.
In the 1990s the growth of the high-tech and bio-tech industries in the Puget Sound region created changes
in every aspect of local housing. Once a blue-collar community of modestly priced subdivision homes, the Seattle metropolitan area experienced inbound migration and demand for a highly paid, well-educated workforce, and for the next 20-plus years, these influences have continued to become a major factor in the demand and pricing for residential real estate including changes in the architectural style, home square footage, and cost.
The 2000 dot-com bubble and the 2007 subprime lending and collapse of the banking industry created two of the major transitions from an appreciating market to one in decline. Fourteen years following this last major correction, the housing industry is experiencing another slowdown. This economic shift is driven by the Fed’s desire to control inflation by raising interest rates. The interest rate for a typical mortgage has more than doubled since the beginning of 2022.
This has effectively priced many buyers out of the market. Those that are still shopping are cautious as they see and
The housing market is resilient. With every down cycle of two to three years, there are, more or less, seven years of stability and growth.
feel the changing climate, with many taking a conservative approach to buying decisions. They realize that the demand of multiple buyers seeking to purchase the same home through bidding wars is no longer a factor, time is now on their side.
Throughout most of this economic growth cycle, prospective buyers were able to benefit from rising stock prices and use the value of their portfolios as a tool to finance real estate. As the stock market declined, this also impacted the economic wealth and purchasing power of prospective buyers.
Inflation is placing pressure on the everyday pocketbook as prices for goods and services continue to rise. Many prospective buyers are seeing household costs increase dramatically while personal incomes remain stagnant or fall short of the trend.
Many cycles are short-lived and those that last under three months have a nominal effect, such as 9/11, minor stock market corrections, and COVID-19. Yes, COVID-19 has had a long-term impact on how we live but its effect on the housing market lasted from March to June 2020. The fear of the pandemic and state government restrictions on showing houses slowed demand for three months. However, changing lifestyle circumstances and real estate brokers’ ability to quickly pivot to virtual showings eclipsed health concerns. Many prospective buyers transitioned to working from home and needed more space and less access to the office. This created more demand in rural and destination locations and/or homes that included recreational activities on-site for life-work balance. Between the summer of 2020 and the spring of 2022 property values were appreciating
at an unprecedented rate. The King County Assessor raised the assessment values for 2022 by more or less than 30% in many suburban neighborhoods.
An appreciating or declining trend in each market segment will vary depending on location, price point, and site and home characteristics. A home close with characteristics prerequisite to meeting a broad need will experience greater demand than a rural home further distant from employment and offer characteristics that have limited appeal. An appraisal or consulting service within a market area requires an independent study to have a thorough understanding of market conditions, appreciation, or decline.
In 1992 I gave a speech on residential value trends studying real estate publications and the NWMLS. I found that there is a direct relationship between the supply of inventory and the number of pending sales occurring each month. Dividing the pending offers that occurred over the month by the number of listings at the end of the month calculates the absorption rate. It measures the strength of the market, the higher the absorption rate the stronger the demand for housing.
Historic trends illustrate that the local housing industry experiences an annual cycle each year. A slower market occurs during the winter/holiday season, demand increases through the spring, stabilizes during the summer, a slight uptick after “back to school” then the traditional holiday period.
When I gave the speech three decades ago, the housing market in past years was experiencing a stable trend and absorption rates were measured for King County at some 25%
to 30% of the available inventory each month. In the summer of 2020 through May 2022 the absorption rate was calculated at over 65% each month and reached a high of over 250% in the first quarter of 2022 indicating that there were at least 2.5 prospective buyers per listing. Due to the short supply of inventory, sellers were receiving multiple offers, buyers making cash offers above the asking price, waiving contingencies, and paying prices that exceeded normal buyer behavior.
With rising interest rates in the spring of 2022, the housing industry began its transition from a sellers’ to a buyers’ market with many areas experiencing a softening in demand, sellers reducing their asking prices, and buyers acquiring real estate below prices paid in the spring months. Over the past six months, absorption rates have declined from some 250% to just under 50%. While there appears to be a softening in the market there remains a limited supply of inventory and reasonably stable demand.
From the peak of the market in the spring of 2022 to the trough in the final quarter of 2022, the market has seen a decline in property values from some 1% to 3% monthly, depending on location, property characteristics, the cost of borrowing money, and supply and demand. For 2023, I anticipate the market will see an uptick in activity due to the limited supply of inventory.
I believe that the market experienced the trough in the latter part of 2022, and in 2023 the first two quarters should receive positive demand and the potential for increasing property values. The justification for this transition is based on the limited supply of inventory, strong demand for housing, and interest rates that have declined from their high of over 7%.
When priced competitively, sellers are seeing multiple buyers and many placing the value of the real estate above the asking price. The first two quarters of the year are typically the most active. This appears to be the case for the future of 2023, when
In the above graphs, inventory (the number of available homes) is compared to the pending sales. In the Puget Sound (top), there was more inventory than pending sales until the beginning of 2020. This heavily favored sellers and created many multiple-offer situations as there weren’t enough homes for sale to meet the demands of buyers. This lasted until about June 2022, when inventory once again began to outpace net pending sales. In King County (bottom), net pending sales have more often outpaced inventory over the years, but we can see similar trends to the Puget Sound region, especially in mid-2022, when inventory again began to exceed the net pending sales.
in January, we experienced a trend of multiple offers where many buyers are paying at, or in excess of, the list price to achieve homeownership.
What do the trends of the past tell us and how do they relate to the future? The housing market is resilient. With every down cycle of up to three years, there are, more or less, seven years of stability and growth. For those who have a short-term
horizon in home ownership, acquiring a residential property may not be the best investment at this time. Historically, home ownership has always been a solid wealth-building option. I do not see that changing, particularly for those who plan to own their homes for at least five to seven years which will likely experience appreciation over time.
n my 21 years of analyzing the housing market and forecasting where I believe the market is headed next, one would think “yeah I’ve seen this before”. The reality is that markets never mirror history. There has yet to be a housing cycle exactly like a previous cycle and this one is no different.
There still seems to be a tremendous amount of chatter surrounding the real estate market that there will be a great collapse in 2023 and 2024 rivaling the previous housing recession. Personally, I could not disagree more with this assertion. The market is behaving very similarly to 2018 and 2019 with multiple rolling quarters of growing sales velocity, bidding wars, double-digit home appreciation, and buyer fatigue, followed up by rising interest rates. The first half of 2018 was very active followed by a six-month pause on the market causing sellers to check their asking prices for both new construction and resale. Interest rates played a key role in 2018 and even more so in 2022.
In June 2022, the Federal Reserve started the first of eight very rapid rate hikes to tamper inflation. While the Fed fund rate is still below historical norms, the rise from 0.25% to 4.5% was the fastest increase since 1980. The rapid increase shook the bond markets which in turn caused mortgage rates to rise above 7% by October of 2022, hammering affordability. We had not seen mortgage rates above 5% since 2010, so it’s not shocking that the real estate market saw sales in the third and fourth quarter of 2022 drop to its lowest levels since 2011.
I am confident that the downward slide in pricing for both new and resale is over. The Puget Sound will be entering a more stable market for the foreseeable future. The closing data coming in the next 30 to 90 days should support my theory.
It’s a complicated question and resale will behave differently than new construction. Most existing home sellers don’t have to sell, which is why we have seen canceled and expired listings increase some 500% in recent months. In a normal month we can see between 200 and 400 listings removed from the market. The average between September and December 2022 was near 1,900 listings per month taken off the market.
Potential home sellers are aware today that they may not or cannot get what they perceive their home to be worth, thus the number of new listings hitting the market is at an annual all-time low, (with the exception of the first two quarters of 2020 which was the lockdown period due to the pandemic.) Trading an interest rate of 4% or less for 6.25% only makes sense if they can get top-dollar. At this point, nothing is forcing homeowners to sell unlike the previous housing recession, and we are not seeing the run-up in inventory due to defaults. There is effectively no distress in the market today because recent equity gains have been so significant and mortgage lending regulations won’t allow a repeat of loose credit scenarios that led us into the Great Recession. Furthermore, the cost of rents has increased to the point, in many cases, that the mortgage payment is less than renting an apartment.
On the other side, we have new construction. Builders need to build and they need to sell their homes. As a rule of thumb right
now, new construction has lost all the gains builders saw in the first half of 2022. In some geographical areas a little bit more, in other areas a little bit less.
High demand driven by low mortgage rates and lockdowns, supply chain struggles, and cost of construction with inflation drove pricing during the pandemic. King County, for example, hit a median list price for single-family new construction home of $1,800,000 in the second quarter of 2022. That’s a 56% increase year over year and a 36% increase from the end of 2021. The current median list price in King County for new construction is $1,309,000 and it is unlikely it will fall much further with the median sold price currently at $1,200,000 and mortgage rates expected to stabilize. Builders still face challenges moving into 2023 with rising financing rates but labor cost and material costs are coming down roughly 10% and the construction time frame is also being reduced which should balance out the financing cost. Builders will be playing catch-up in the spring after starts hit historic lows in the third and fourth quarters of 2022. The reality is homebuilders are well behind in production levels and the Puget Sound region is undersupplied, especially for price points below $1 million where the greatest demand exists—this is one reason why in-city condominiums will make a comeback.
I am confident that the downward slide in pricing for both new and resale is over. The Puget Sound will be entering a more stable market for the foreseeable future. The closing data coming in the next 30 to 90 days should support my theory.
Here is where we stand in early first quarter of 2023. Based on the past 90 days of sales, the months of supply for new and resale combined is 1.7 months. With just a slight uptick in sales the months of supply will drop below one month again. Early data from January sales suggest this is already happening. The average number of daily residential sales for the month of December was 93 units per day. During the third week of January, that number hit 153 sales per day. To put this increase in sales velocity in perspective, the change in sale volume from December 2020 to January 2021 was 11%, December 2021 to January 2022 was 10%.
The last time we saw an increase in sales from December to January near this percentage was January 2019 at 41%. Escalation clauses are back on the table from buyers if the home is desirable, but we also have limited buyers due to interest rates. Meaning they will go after the perceived “good deal”.
Throughout 2023 the Federal Reserve will slow their rate hikes and likely pivot towards the third or fourth quarter which will settle the bond market and mortgage rates should come down into the fives. I would not be shocked if we see them drop into the high 4% range for a short period of time. Savvy buyers who realize their opportunity to secure a home at the sharpest pricing will likely be out in droves this spring, knowing that waiting may mean declining inventory levels and more competition before long. Even if mortgage interest rates remain elevated, they’ll refinance in a year or so during the U.S. presidential elections when the Fed will be more inclined to stimulate the economy.
Expect 2023 to be a good year.
Throughout 2023 the Federal Reserve will slow their rate hikes and likely pivot towards the third or fourth quarter which will settle the bond market and mortgage rates should come down into the fives.
The change in sales volume from December 2022 to January 2023 is currently 61%.
SAN JUAN
$960,000 ( 11.63%)
RESIDENTIAL HOMES
$434,500 ( 11.41%)
CONDOMINIUMS
ISLAND
$570,000 ( 8.06%)
RESIDENTIAL HOMES
$320,000 ( 8.47%)
CONDOMINIUMS
CLALLAM
$450,000 ( 8.43%)
RESIDENTIAL HOMES
$385,000 ( 20.31%)
CONDOMINIUMS
JEFFERSON
$624,950 ( 11.60%)
RESIDENTIAL HOMES
$471,400 ( 6.53%)
CONDOMINIUMS
GRAYS HARBOR
$346,750 ( 11.87%)
RESIDENTIAL HOMES
$255,000 ( -8.93%)
CONDOMINIUMS
MASON
KITSAP
$539,711 ( 11.60%)
RESIDENTIAL HOMES
$385,000 ( 6.53%)
CONDOMINIUMS
$405,000 ( 8.00%)
RESIDENTIAL HOMES
$500,000 ( 12.49%)
CONDOMINIUMS
THURSTON
$500,000 ( 9.17%)
RESIDENTIAL HOMES
$330,000 ( 24.53%)
CONDOMINIUMS
PACIFIC
$325,000 ( 8.70%)
RESIDENTIAL HOMES
$288,977( 29.62%)
CONDOMINIUMS
LEWIS
$399,000( 9.80%)
RESIDENTIAL HOMES
$351,200 ( 16.68%)
CONDOMINIUMS
$600,000 ( 9.29%)
RESIDENTIAL HOMES
$379,000 ( 8.29%)
CONDOMINIUMS
SKAGIT
$545,000( 9.00%)
RESIDENTIAL HOMES
$400,000 ( 12.68%)
CONDOMINIUMS
SNOHOMISH
$765,000 ( 12.50%)
RESIDENTIAL HOMES
$515,000 ( 11.96%)
CONDOMINIUMS
KING
$900,000 ( 8.68%)
RESIDENTIAL HOMES
$500,000 ( 8.93%)
CONDOMINIUMS
PIERCE
$551,000 ( 9.65%)
RESIDENTIAL HOMES
$399,950 ( 16.24%)
CONDOMINIUMS
The median closed sales price of single-family homes and condominiums is shown for each county.
OKANOGAN
$339,000 ( 13.00%)
RESIDENTIAL HOMES
$586,000 ( 21.33%)
CONDOMINIUMS
Following two years of unprecedented growth, the trendlines looked a little flatter in 2022. The housing market for the first half of 2022 looked very different compared to the second half of the year, but the slowdown seen across Washington in the summer and fall wasn’t enough to stop year-over-year median sales price growth entirely.
CHELAN
$585,000 ( 13.59%)
RESIDENTIAL HOMES
$444,500 ( 27.36%)
CONDOMINIUMS
KITTITAS
$553,005 ( 14.27%)
RESIDENTIAL HOMES
$449,000 ( 28.29%)
CONDOMINIUMS
Nearly every county on this map saw positive median sales price growth in 2022 in both residential home and condominium sales.
The median sales price for a given region provides excellent information for buyers and sellers alike. For those looking to purchase a home, it helps them identify geographic areas at large that fit within their expected budget. For sellers, it provides necessary information during the process of pricing their listing and obtaining interest from buyers at a particular price point.
While home sales price data has seen ups and downs, whether comparing months year-over-year or observing trends monthto-month, witnessing this positive median sales price growth in 2022 is important for homeowners to track, since a home is typically a long-term investment.
This map may look back at last year, but as the contributors in this report look forward, most expect to see long term equity gains.
NWMLS data. Information was obtained from sources deemed reliable but cannot be guaranteed. Reader is encouraged to perform independent due diligence before acting upon reports outlined herein. Errors and omissions excluded.
by Patrick Bannon | President Bellevue Downtown Association
he blocks under construction and cranes high above the Bellevue skyline are hard to miss—signs of growth and change are still to come. Not only will these new towers shape the skyline, but their spaces at street level will also bring new life to those blocks.
Today, the 410-acre heart of Bellevue, less than 2% of the city’s land area, is the state’s second-largest city center and among North America’s most dynamic urban neighborhoods. Downtown is a dense hub of workspaces, hotels, retail, restaurants, and home to nearly 15,000 residents. It has been a stunning transformation just five decades in the making.
More than two million square feet of offices are under construction, adding to the two million recently completed, most of it currently leased to Amazon. Thanks to the Pacific Northwest’s quality of life and the legacy of leading companies,
Downtown Bellevue is a thriving center for global talent and technology innovation. Beyond downtown, the fundamentals of Bellevue are exceptional: a collaborative city government, top-notch health care, excellent access to jobs, a superb school district, and residents reflecting the world’s diversity.
Like downtowns everywhere, we face the critical question of “what next?” How will those office towers be used in light of remote work and changing needs? The short (and admittedly easy) answer is that we don’t exactly know. The occupancy pace will slow, and the expected growth in daily office trips will take longer than expected. The nearly seven million square feet of projects in the development pipeline may also change to a different type of project or stretch out their timelines. As the economy and tenants find their footing, Downtown Bellevue is well-positioned to adapt.
We expect demand to grow for what downtown already offers, especially in retail, dining, and visitor experiences. The next three years will be extraordinary as the major office projects open, each with new ground-floor tenant spaces for shops, restaurants, and other small businesses. We will strengthen access with regional light rail service at the Bellevue Downtown and East Main stations, along with four other stations serving the city. We will make strides on the Grand Connection through downtown, along with designs for an iconic bridge crossing I-405 to Wilburton and Eastrail. Our community will take hundreds of smaller actions to enhance downtown’s livability, parks, and cultural attractions.
The core of the city will continue to be a beating heart for our larger regional economy. Although thousands of units are already planned, the demand for housing of all types will grow, not just downtown but throughout Bellevue and the Eastside. Affordability will be a top issue impacting every Puget Sound community. And historically, the focused planning and investments that spurred growth in our region’s downtowns have led to solutions and opportunities.
The creative process of “city-building” itself requires perseverance for a long game. Nowhere is this clearer than in Downtown Bellevue, where change occurs on nearly every corner. The measure will be how well we plan and care for its resilience over time. Downtown’s complexity, with its evolving blend of buildings, culture, innovation, and community, is precisely what makes it an attractive place that can bring simple joy and better connections to everyday life.
Take the family to KidsQuest Children’s Museum. Go for dinner on Main Street. Visit Bellevue Arts Museum. Lounge with popcorn at a movie in Lincoln Square. We invite you to find your joy and something new in the heart of Bellevue.
Affordability will be a top issue impacting every Puget Sound community. And historically, the focused planning and investments that spurred growth in our region’s downtowns have led to solutions and opportunities.
The BDA aggregates information from the City of Bellevue’s quarterly Major Projects Report, permitting activity, project websites and member input. This map pinpoints major projects either under construction or planned for redevelopment in Bellevue’s downtown.
RESIDENTIAL OFFICE MIXED-USE VIEW FULL LIST
Information depicted above is subject to change. Scan code to view full updated list.
Average weekday King County Metro ridership for December 2022 was up 11% over December 2021.
55,811
The last quarter of 2022 saw a record 55,811 occupied residential units in downtown—an increase of more than 5,000 units since Q4-2020.
2,784
The DSA/MID Clean Team removed 2,784 graffiti tags and/or stickers from public infrastructure and private property in December 2022.
n downtown Seattle, the new year brings momentum, exciting openings, and reminders of why people choose to live in vibrant urban areas. At the Downtown Seattle Association, we’re focused on renewal and reimagining this collection of 12 neighborhoods as we continue to recover. While we still face some significant challenges, progress made in 2022 (and the many transformative initiatives underway) leaves me feeling incredibly optimistic.
From new business openings, an unprecedented 106,000 people now living downtown and the capping off of major projects, downtown’s resiliency was on full display in 2022. A record cruise season brought 1.2 million passengers through the Port of Seattle, while the waterfront redevelopment took another step forward with the reopening of Colman Dock following a five-year rebuild. DSA has noted on its Recovery Dashboard that millions of people visited attractions and booked hotel rooms downtown.
Our revered arts and cultural community welcomed thousands of guests back to theaters, performance halls and museums, and our professional sports teams filled arenas and stadiums across downtown. Fueled by a Mariners team that brought playoff baseball to Seattle for the first time in decades, LINK Light Rail recorded 2,323,000 boardings in September—the busiest month ever. Plus, the recent opening of the Convention Center Summit building demonstrates our commitment to
growth and will bring hundreds of thousands of additional people to the city each year.
These highlights are just a sample of the many things that you can only find in the heart of our city. The active mix of attractions, amenities, events, and institutions create a place that is energized. Great downtowns are not static and our downtown is evolving. Since 2010, we more than doubled our residential population and we’re welcoming even more urban residents with over 6,500 units currently in the pipeline.
People who live in our city center have come to expect that their neighborhood will be clean and welcoming. With the work of the Metropolitan Improvement District, a program managed by DSA, residents in six downtown neighborhoods (Belltown, Denny Triangle, Pioneer Square, Retail Core, Waterfront and West Edge) receive cleaning and safety services that supplement what the city is able to provide. And we’ve expanded those programs over the last year with increased staffing, additional equipment, and security patrols.
As city centers around the world rebound from the pandemic, we firmly believe the assets that set downtown Seattle apart (natural beauty, diversified economy, arts and entertainment, retail, and dining) combined with what’s on the horizon, (more residential options, a new waterfront, MLB All-Star week, the FIFA World Cup) position us firmly on the global stage.
Total monthly visitors since 2019
Downtown Seattle was the first American urban center to experience the impacts of COVID-19, enduring a sudden economic downturn. As downtown continues to recover, DSA publishes a monthly Recovery Dashboard examining key recovery metrics. The data sets provide a comparison point to the same time period in 2019. Additionally, the dashboard features notable stories that provide context regarding downtown’s recovery, renewal, and reemergence.
Monthly hotel rooms sold compared to 2019
Nearly 2.2 million visitors came downtown in December, an increase of more than 8% compared to December 2021.
Source: Placer.ai
Percentage of 2019 worker foot traffic to 2022
Demand for hotel rooms weakened slightly in December, with room stays at 71% of 2019 levels. A bright spot during the holidays was New Year’s Eve, when downtown hotel demand hit 97%, nearly matching 2019 occupancy levels.
Sources: Visit Seattle, STR
Worker foot traffic continued to show signs of improvement, increasing to 44% of December 2019’s levels. This represents the third consecutive month of improving return-to-office figures.
Source: Placer.ai
Residential units continued their post-pandemic climb in the fourth quarter of 2022, reaching record levels of inventory downtown and number of occupied units (nearly 56k).
Source: CoStar
he new year once again comes with a new set of challenges for housing development. Construction pauses during the pandemic, combined with increasing development costs and material supply delays, have tied up development equity, resulting in a flatlining of more condominium supply. Most proposed condominium projects have converted to apartments, others paused, and no developer has announced a new project groundbreaking anytime soon. This lack of new product is making for-sale new condominiums inherently limited, and ultimately, valuable.
Right now, developers are pausing but economists are beginning to signal that the market has finally adjusted, and the capital buyer investing today will experience a higher probability of equity growth.
In Seattle, it takes a minimum of five to seven years from design to occupancy to deliver a high-rise condominium and until housing scarcity pushes prices up and projects begin to pencil in again, what you see is what you get.
Against all odds, Daniels Real Estate is delivering Graystone this summer because we have always been bullish on Seattle and urban home ownership. We have been developing catalytic projects for over 40 years during every economic cycle, and one thing remains constant: Seattle is home to pioneers, innovators, and the creative class.
Life is springing back, and the urban charm is returning to Seattle. Workers are returning, and people are moving on and moving in. Those who bet on Seattle will be rewarded. And Daniels Real Estate is doubling down on its commitment to urban homeownership in the Emerald City.
Condominium development is not easy in the State of Washington—especially over the last four years—and 2023 will have its challenges. But we firmly believe that urban homeownership is essential to the vitality of any city. If the pandemic taught us anything, it's that urban communities depend on long-term relationships, both residential and commercial, to look after each other to create social capital.
We firmly believe that urban homeownership is essential to the vitality of any city. If the pandemic taught us anything, it's that urban communities depend on long-term relationships, both residential and commercial, to look after each other to create social capital.
ABOVE: The pipeline for new construction condominium developments in Seattle (excluding the Eastside) defines the end of the current development cycle in 2022 with a new development cycle anticipated to commence thereafter with closings in 2024-2027. No new condominiums are expected to deliver in 2025. There are planned projects, which are approved but not yet moving forward as their sponsors need to engineer higher values, in excess of $1,500 per square foot in order to pencil. Presales remain challenging in the current marketplace. *Data reflects sales and projected sales as of Feb. 1, 2023.
SOLD AVAILABLE PROJECTED
This summer, Daniels Real Estate will deliver 271 condominium homes on First Hill, a neighborhood that has been a “century in the making” as Seattle’s first neighborhood. We purchased the site because of its unique location along heritage tree-lined streets, adjacency to landmark amenities, and zoning that enabled us to include a waterfall parklet rather than ground level retail. The rooftop amenity penthouse features mountain peak views in all four cardinal directions.
The housing market has shifted but we are still experiencing the greatest amount of amassed home equity in modern times. The unprecedented equity makes the coming market fundamentals different than those in the past, but it should also make buying, whether a first condominium home or a right-sizing investment, key to your real estate goals.
The first quarter of 2023 will be the opportunity of a lifetime. While the market right-sizes and prices bottom out, those who purchase in 2023 will be amassing unprecedented equity in an urban housing market that won’t see anything new for some time to come. The fact is that many homes will be sold well below replacement costs.
Timing the market is now—and Graystone is priced to meet the market in 2023.
Against all odds, Daniels Real Estate is delivering Graystone this summer because we have always been bullish on Seattle and urban home ownership. We have been developing catalytic projects for over 40 years during every economic cycle, and one thing remains constant: Seattle is home to pioneers, innovators, and the creative class.
Discover the timeless Graystone lifestyle in Seattle’s First Hill neighborhood where tree-lined streets and secret gardens meet urban convenience. This is a rare opportunity to own a sophisticated home in the only new condominium tower in a neighborhood experiencing a residential renaissance. The building’s incredible location puts Graystone owners in proximity to cafes, galleries, dining, and theatre as you stroll by a blend of historic buildings and modern architecture. And when you simply want to stay in, your home expands to more than 20,000 square feet of amenities with concierge services provided by the award-winning Columbia Hospitality.
In anticipation of the opening this summer, Graystone has moved to a new Sales Center just across the street from the tower and is now scheduling hard-hat tours.
NEW SALES CENTER ADDRESS: Sales Center | 907 8th Avenue, Seattle, WA 98104 CONTACT | 206.717.5000 | TheGraystone.com
by Amy Mutal | Principal | Financial Advisor Prevail Wealth Management, LLC
fter coming off a tough year for the stock market, many investors are pondering what lies ahead for the markets.
After 40 years of declining rates, inflation is at its highest level since the early 1980s. Investors may be hoping for a return to normal after the Federal Reserve stops raising interest rates and inflation subsides. As rate cycles reverse, the process often takes longer than anticipated which means inflation may persist. This means a straight path forward is unlikely due to several shifts that may define the next decade of investing.
Another big question many are asking is, are we headed for a recession? As of the time of writing this article, it has not yet been confirmed, although, many economists believe we are. Recessions are painful, no doubt about it. But they are necessary to wash out the excesses of prior growth periods like the one investors enjoyed over the past decade. You can’t have such a prolonged period of growth without an occasional downturn to balance things out. It’s normal, expected, and considered a healthy part of how our markets work.
When looking at the global economy, many economists agree that it appears Europe is likely already in a recession, made worse by the war in Ukraine. China’s growth has decelerated essentially to zero, pressured by rolling COVID-19 lockdowns. And the U.S. economy, while stronger than most, appears headed for a downturn as elevated inflation and higher interest rates take their toll. If the U.S. does slip into a recession, if it’s not already in one, how bad might it get? Economists expect it may be worse than the post-tech and telecom bubble burst recession of the early 2000s, but not nearly as bad as the 2008–09 financial crisis. It’s important to not lose sight of the fact that recessions set the stage for the next period of growth. The stock market seems to be reflecting a more realistic view that a recession is looming, but historically speaking, stocks also tend to anticipate a brighter future ahead, long before it becomes clear in the economic data.
While each recession is painful in its own way, one potential bright spot is that they don’t historically last very long. An analysis of 11 U.S. cycles since 1950 shows that recessions have ranged from two to 18 months, with the average lasting about 10 months. What’s more, stock markets usually start to recover before a recession ends. If history is a guide, they could rebound about six months before the economy does.
As an investor, the benefits of capturing a full market recovery can be powerful. The strongest gains have often occurred immediately after a bottom. One thing all past recessions and bear markets have in common is that they eventually end.
During a recession or economic downturn, where to invest your money can be both challenging and stressful. Certain investments, such as stocks, can be riskier in a down market. However, you might be able to achieve stable returns in a recession if you manage your risks by rebalancing your portfolio or using strategies such as dollar-cost averaging. Investors need to act cautiously but remain vigilant in monitoring the market landscape for opportunities to pick up high-quality assets at discounted prices. These are difficult environments, but they also coincide with the best opportunities. Conversely, investors who want to survive and thrive during a recession will invest in high-quality companies that have strong balance sheets, low debt, good cash flow, and are in industries that historically do well during tough economic times. Once the economy is moving from recession to recovery, investors should adjust their strategies.
It’s also important to keep a long-term view. If you won’t need to withdraw from your account for at least five to 10 years, you shouldn’t worry too much about short-term market changes.
As an investor, the benefits of capturing a full market recovery can be powerful. The strongest gains have often occurred immediately after a bottom. One thing all past recessions and bear markets have in common is that they eventually end.
An analysis of 11 U.S. cycles since 1950 shows that recessions have ranged from two to 18 months, with the average lasting about 10 months. What’s more, stock markets usually start to recover before a recession ends. If history is a guide, they could rebound about six months before the economy does.
Long-term investors willing to stand through these volatile times will likely be able to eventually reap the rewards.
However, if you need to access the funds sooner, you may want to allocate enough money into an interest-bearing money market fund. It’s not ideal to be withdrawing money from your equity portfolio when the stock market is down. Setting money aside for the first year or two of retirement, college, or an emergency fund can provide you with cash when you need it, which helps you avoid dealing with market fluctuations.
There are also investments to consider to hedge against inflation. Real estate investments, including raw land, residential properties, commercial properties, and real estate investment trusts (REITs) are assets in which value historically increases faster than the rate of inflation. Unlike stocks and bonds, real estate is an asset that generates recurring income streams and an increase in asset value over a long-term holding period. For these reasons, real estate is often referred to as a “hard asset.”
You understand the importance of maintaining your physical health. Just like your physical health, your financial health is equally vital. If your finances had to pass a physical test, would they pass with flying colors? When it comes to protecting your family and securing your legacy, it takes healthy finances. Are yours up to the test? If you don’t know, it’s time for a checkup. Whether your last medical appointment was for preventative care or to diagnose an issue, a series of questions and tests were run to make an accurate assessment of your physical health. This snapshot helped devise a plan for your optimal physical health moving forward.
When was your last financial checkup? Much like your physical health, it’s essential that you are aware of your financial well-being to determine what adjustments are necessary to stay on track. Just like with our bodies, to ensure we are living our best life and propelling toward our goals, it’s vital that we have a clear knowledge and understanding of our level of financial wellness.
While the net returns of bonds, stocks, and fixed-rate vehicles stand to take a hit as inflation rises, real estate investors can mitigate the effect of inflation by raising rents on their properties. Overall, you can expect that the private real estate in your portfolio, as an alternative investment and real asset, will fare better amid inflationary challenges when compared to traditional stock and bond investments. Therefore, it may be an opportune time to consider re-balancing your portfolio to include private real estate.
No one can predict what the stock market will do and how people will react in the short term, so it’s wise to commit to your investment strategy during a market downturn and participate in the recovery.
To schedule a complimentary financial checkup, visit www.prevailwealth.com/rsir
*The information provided is for general information purposes only and all expressions of opinion are subject to change without notice in reaction to shifting markets.
by Anthony Maschmedt | Principal Dwell Development
It’s a big question with some important answers. We focus on sustainability because we know it’s the right way to build and know it is what everyone should be focused on. Climate change impacts all of us and is a key factor in how and why we build the way we do. Not only are the homes we build good for the Earth, but they are also good for the people who live in them. We create homes for one’s well-being and the health of our planet. Living sustainably is as much about the greater good as it is about a homeowner’s health, comfort, and livability.
As the founder of Dwell Development, I often get asked
“why” we build sustainable homes.
Like a whole-house fan, the HRV constantly pulls stale air out and brings fresh air in, and the cold air from outside passes the warm air on its way in, so it’s preheated. Works great in tandem with Air Purification Systems.
Air Purification Systems
Especially important systems in our battle against fires/ smoke/COVID-19/allergies.
In Washington, the power that you create that goes unused by your house is sold back to the grid and credited to your heating bill. You build credit during the warm months, which helps keep your bill low during winter months.
Many building materials include added formaldehyde or VOCs in them, which can make you sick. Choose building materials wisely.
In the 1960s, architects in the United States created a building concept known as Passive House. Unfortunately, this method of building failed due to the lack of knowledge surrounding the importance of ventilation. Germany picked up where the Americans left off and revitalized the approach. Acknowledging if you build it tight you must ventilate it right was the missing component. From this Passivhaus was born. At Dwell Development these ideals are the foundation of all of the homes we design and build. We call it, “powered by Passive House”.
At Dwell, all our homes are certified 5-Star Built Green. Built Green is a certification program associated with the Master Builders Association of King and Snohomish Counties. It is more of a holistic approach. It not only focuses on heat loss and energy savings— but it is also about water conservation, material selection, fresh air, renewable energy, and comfort.
By creating and building an air-tight home with heat recovery ventilation, high-performance windows, and massive amounts of insulation, the benefits are apparent when done systematically. The home consumes an average of 50% less energy and the homeowner benefits because they can save as much as 50% on their energy bills even before the addition of solar.
With the addition of a smart home management system, you have a recipe for not only green, healthy living, but a system that allows you to keep tabs on all aspects of your home, so you know everything is working correctly and efficiently. At Dwell, we’re partial to Kirio, which was developed by one of our earliest homeowners. At the end of the day, we add all these innovative systems to your home, but if you’re not managing correctly, you may be losing out on the benefits they offer.
For folks that are not in the market for a new sustainable home for whatever reason, there are plenty of practices and systems that you can implement in your current home to live your healthiest, most sustainable life. Following the Passive House philosophy, making your home as airtight as possible will increase its efficiency. Replacing old leaky windows with double or triple-pane windows, adding more insulation, and swapping out high-water-use plumbing fixtures with WaterSense fixtures and toilets can contribute to a home’s sustainability and ultimately save money.
As the impact of climate change on the world around us creates unpredictable weather—a wildfire season that stretches into the fall, more winter storms, and heat waves previously atypical in the Pacific Northwest—sustainability needs to be on everyone’s mind. At Dwell, we believe it’s not just about making responsible decisions during the building process, it’s about creating a home that is sustainable for your best-lived life today, and in the future.
CLAY is a marketing powerhouse spearheading innovative digital and print campaigns, brand development, lead generation, and more. Our partnership with Realogics Sotheby’s International Realty affords their global real estate advisors seamless access to CLAY’s cutting-edge design and in-depth real estate market expertise. Each project has a particular identity, and we want to honor and amplify that by giving it a distinct voice, look, and feel through our wide array of services. We’re here to help you stand out.
CONNECT TO YOUR SPACE THROUGH COLORS, TEXTURES, AND SHAPES FOR DEFINED LIVING.
by Rahja Oyake | Allied ASID President WA State Chapter of the American Society of Interior Designers
Within our human-built environment, an incorporation of the Passive House movement—eco-friendly and biophilic earth elements are strong considerations for one’s overall well-being. Therefore, a mainstay of an earthy color palette is being infused amidst the finishing touches—as “Terra” and “Raspberry Blush” will be seen in 2023.
In the year ahead, differentiate the spaces of your home with variegated artisan-style tile, warm putty paint colors, and traditional brass.
Top Right: Resource Furniture, Divano Curve Sofa
Bottom Right (Bold): Kelly Forslund/Casamance, L’atelier 12
Bottom Right (High): Trammell-Gagné/Brento Babylon
Bottom Left: Photos courtesy Kat Lawton Interiors
Within architecture and design, curves and arches help soften a space and bring an elevated level of comfortable luxury.
Want to make a statement but are afraid of the commitment? Bold wallcovering paired with neutral furnishings can make that statement for you. Mix it with other patterns throughout the room to bring personality to any space.
All matte is out. Now, it is all about high-shine paints, wall coverings, and shimmery fabrics. It’s a unique way to brighten up any space.
by Kelley Schaefer-Levi | Inside Sales & Marketing Realogics Sotheby’s International Realty
moved frequently growing up and my parents, forever in pursuit of realizing their dreams, have owned upwards of 12 homes. So, it may come as no surprise that I now spend my days helping ease the transition of moving and relocation. I connect buyers and sellers with global real estate advisors at Realogics Sotheby’s International Realty and across the Sotheby’s International Realty® (SIR) Global Referral network (GRN). The GRN is a network of 26,000 global real estate advisors and referral teams working in over 1,000 local SIR offices internationally. The network provides exceptional opportunities to advisors, buyers, and sellers unlike any other real estate brokerage referral network I have seen. I guide people getting started and align them with a qualified global real estate advisor who is ideal for their situation, whether relocating to the Puget Sound for work or realizing their dreams of vacation homeownership or real estate investing from sea to sky and in between.
SIR’s global network benefits sellers looking to smartsize in Seattle and buy a vacation or second home or investment property in popular markets like Palm Springs or Scottsdale. Warm weather destinations like these are some of our more frequent outbound referrals from Washington residents in the winter months. The GRN simplifies the process for advisors and clients, making the referral and relocation process relatively seamless.
Ultimately, buyers and sellers work in tandem with advisors from SIR affiliates in both locations. To facilitate, I collaborate with local referral and relocation teams that streamline the process of finding the “best fit” for their agents’ clients and vice versa for our agents’ clients. The benefit of working with two Sotheby’s International Realty agents in two separate locations, and a referral team who assigns the referral to the best suited advisor to the client’s needs is two-fold. Advisors
These connections and the Sotheby's International Realty Global Referral Network provide peace of mind that clients, family, and friends are being well taken care of on both ends of their move.
81 countries & territories
1,000 offices worldwide
Advisors connect and discuss buyer needs, make introductions, and loop in their referral team.
Works with Realogics Sotheby’s International Realty advisor to list and sell property.
Locate “best fit” agent in outbound market where seller plans to buy.
Relocates to the outbound market.
typically communicate with each other ahead of time and throughout the life of the referral if needed. Both have the client’s best interest in mind, and the referral teams provide high-touch service from assignment to close. It’s a win-win for everyone.
Last year, European markets saw an increase in American buyers seeking second homes with the exchange rate of the U.S. dollar and euro nearly equal for the first time in 20 years. Utilizing the GRN, I worked with Sotheby’s affiliates in France, Italy, and in the Costa Brava region of Spain to identify global advisors for our broker’s clients in each country. Locally, we saw continued movement across the Puget Sound with buyers actively relocating to the Seattle area from feeder markets including California and Texas, and sellers listing their homes and moving out of state with the help of referral connections around the globe.
These connections and the SIR Global Referral Network provide peace of mind that clients, family, and friends are being well taken care of on both ends of their move. For those selling in one location and buying in another, this kind of concierge service makes all the difference. For me, it brings gratification knowing that I have assisted in some small part with one of life’s big transitions.
IF YOU OR YOUR CLIENT NEED HELP FINDING A GLOBAL REAL ESTATE ADVISOR, CONTACT
KELLEY SCHAEFER-LEVI (AtYourService@rsir.com)
ou can always change and update your home’s wall color, fixtures and appliances, and in many cases, you can adjust the layout and the floor plan of your home. But when you purchase a home, you are choosing a city, town, neighborhood—and these aren’t as easy to update with a paint sample and a brush.
Where you live matters. In 2023, we’re focusing on five different communities across the Puget Sound that offer specific opportunities for new residents. For some, it’s a rare influx of housing availability, for others it’s about yetuntapped city growth or the anticipation of equity gains in a transitioning city center, and for some the focus is on the unique opportunities that offer a lifestyle unlike any other across the region.
The real market that matters is the one that you live in, move to, work in, or retreat to when you’re ready for an escape.
We invite you to explore these communities and imagine your day-to-day in a different locale. As you think about your next destination, whatever your home goals may be, discuss with your Realogics Sotheby’s International Realty real estate advisor what you want out of your next neighborhood— our local expertise could help you find a hidden gem in an unexpected location.
he Kitsap Peninsula is dotted with hidden gems. Is it possibly Washington’s best-kept secret? With a flourishing downtown, its Nordic roots on full display, and easy access to the waterfront, Poulsbo is the kind of town that woos visitors into becoming life-long residents. Its cost of living is less than Bainbridge Island to the southeast, it offers traditional Craftsmen and Bungalow homes near downtown, as well as more private residences farther outside of its city center, and of course, ample waterfront opportunity, whether you may be looking for deep water to moor a boat, or just breathtaking waterfront views of Liberty Bay.
One of Poulsbo’s most distinguishing features is the downtown and waterfront’s dedication to its Nordic heritage. While Seattle’s Nordic Museum tells a similar story of migration, Poulsbo has embraced the Nordic culture through architectural nods, baked goods, and multi-day festivals that the in-city stylings of Ballard have turned away from during a surge of in-city growth. The parallel here between the two communities is quite apparent. As the pandemic opened the door for remote work, those who seek a life near the water with Scandinavian conveniences and a calmer pace of growth may look no further than Poulsbo itself.
While Poulsbo’s school districts aren’t recognized as the top in the state, websites including niche.com have recognized its public education for its achievements in college preparedness. As evident from its local events, the community values tradition, art, and a thriving business community, as well.
Between 2010 and 2021, the population of Poulsbo grew by 26.74%. The only Kitsap community that saw more growth was Port Orchard, and across Kitsap County, the population grew by just under 10%. The pace and community of Poulsbo have made it welcoming to retirees, with 21.6% of residents 65 years old or older, it’s a slightly older population than Kitsap County as a whole. That shouldn’t discourage the benefits of this calm pace of living to any who might desire calm morning strolls along Liberty Bay, or who want to take advantage of the city parks or longer hikes at other Kitsap County outdoor respits.
With a flourishing downtown, its Nordic roots on full display, and easy access to the waterfront, Poulsbo is the kind of town that woos visitors into becoming life-long residents.Photography by Matthew Gregg in focus: Poulsbo
urrounded by forests, state parks, and lakes—Snohomish is a charming city boasting contemporary homes, many offering acreage and square footage not easily found in the metro area. Bordered on its south side by the Snohomish River and conveniently located less than 10 miles southeast of the city of Everett, it’s a popular choice for those who seek a sense of community surrounded by historic charm and tradition.
Originally established to support the surrounding agricultural community, Snohomish became a logging town because of the area’s dense forests of Douglas Firs. Around the turn of the century, Snohomish’s economy diversified as the area’s soil and climate made for superior fruit growing. And to those exploring the downtown commercial district, a sense of this history remains. Well-known for its abundance of antique shops—always hiding unique and unexpected treasures—this neighborhood is listed on the National Register of Historic Places. Restaurants, bars, salons, boutiques, and more line the streets of this well-preserved and welcoming historic district that's the heart of Snohomish. It all provides a comfortable home base for anyone looking to enjoy the area’s many other perks, including its 170+ acres of parks and recreation areas open to the public, including 84-acre Willis Tucker Community Park.
by Alyssa Morrison | Communications Editor Realogics Sotheby’s International Realty Photography by Matthew GreggWhat may seem surprising is that the city hasn’t seen incredible growth over the past 10 years, especially when likened to comparable communities across King County. Between the 2010 and 2020 censuses, the population grew by just over 1,000 residents. For some, this adds to the allure, a small-town feeling in a still-small town. Near the city’s historic district, those in search of homes in classic styles, like that of Queen Anne homes, may find well-preserved beauties. More often, Craftsman and Traditional homes line city streets and culs-de-sac, while some neighbors may find opportunities to build custom homes in the Northwest Contemporary style so common across the region. Throughout the exurban migration during the pandemic, this safe city was an ideal choice for those migrating from the metro area over the last few years, looking for homes that offered more space and convenience in safe neighborhoods with good schools. The public education here is among the top in Washington. The Snohomish School District rounds out the top 25 best school districts in the state and is also ranked highly for its athletic programs and districts to teach in.
For Snohomish residents, the allure of their town feels like a well-kept secret. An area yet to explode in population growth, where equity on homes has seen a great return, but it’s the city, community, and the opportunities the area offers that are the true reward.
Well-known for its abundance of antique shops—always hiding unique and unexpected treasures—this neighborhood is listed on the National Register of Historic Places.
ophistication and practicality; connectedness and proximity; First Hill is akin to its surrounding neighborhoods—Downtown, Capitol Hill, the Central District, and Cherry Hill—yet is entirely distinctive, with amenities incomparable to the rest of the city. As one of Seattle’s premier neighborhoods, this in-city locale offers easy access to public transportation, a near-perfect Walk Score®, and an opportunity for luxe homeownership at one of the last few new developments in the city.
In Seattle, some names are unmistakable—Charles Frye, Morgan Carkeek, and William Boeing to name a few. These last names can be seen across the city today, but in the 1890s, these and other elite city residents called First Hill home. While the neighborhood looks increasingly different since they took up residence, one aspect continues to remain true: there is an air of sophistication with nods to Seattle’s heritage. A few residential homes continue to dot the streets of this bustling enclave, but the progress over the last century here is seen in stellar condominiums that provide access to all of the
amenities one could want at their doorstep. Graced by history and urbanity, a trip down the sidewalk offers a mix of modern living with touches of distinct architecture and timeless style.
Now, more than ever before, may be the best time to call First Hill home. As Graystone opens—projected for the summer of 2023—it's the last new condominium development in the city in the foreseeable future. For residents of First Hill, convenience is first and foremost. Steps from the LINK Light Rail, but even closer to the Seattle Streetcar, along with numerous bus lines and easy ride-share opportunities, getting around is incredibly simple, if you need to go anywhere at all. Pick up your morning coffee from Sugar Bakery and Café on Madison. Quintessential watering holes invite, like The Hideout. And eclectic menus cater to diverse tastes along the streets that surround “Pill Hill.” Yes—the most convenient and unique aspect of this evolving neighborhood steeped in history is its proximity to the area’s premier medical facilities. Top doctors and specialists in their fields work, if not also live and play, in the neighborhood as well, with three major hospitals all centrally located here.
Graced by history and urbanity, a trip down the sidewalk offers a mix of modern living with touches of distinct architecture and timeless style.
by Alyssa Morrison | Communications Editor Realogics Sotheby’s International Realty
ome people long to be the first, to be there before it happens, so they can say, "I was here when". And that’s a tricky proposition in real estate. Searching to purchase a home in an "on-the-rise" community doesn’t usually guarantee a timeline for seeing a spike in your home’s equity. But here is what can be forecasted about the future of Sammamish:
Not only is it a desirable community today, perfect for those who seek the slower pace of suburban life, but in 10 years, when the Sammamish City Town Center plan is complete, it will be among the Eastside’s premier destinations for retail, dining, and community events, all in a centrally located, mixed-use space.
From a value perspective, for those thinking about making the move to Sammamish, the time is now, according to those following the market. Like purchasing in Redmond before Redmond Town Center or Kirkland before the Village at Totem Lake, which offer additional convenience and desirable retail experiences, the plan for the Sammamish Town Center will likely elevate the home desirability even more. The objectives for the project are forward-thinking and mixed-use. Described as “a vibrant, urban, familyfriendly gathering place in a healthy natural setting fully integrated and synergistically complement the public parks and open spaces being developed as part of the Sammamish Commons.”
Not only is it a desirable community today, perfect for those who seek the slower pace of suburban life, but in 10 years, when the Sammamish City Town Center plan is complete, it will be among the Eastside’s premier destinations for retail, dining, and community events, all in a centrally located, mixed-use space.
As it is, Sammamish continues to be a sought-after Eastside community. Spacious residences and luxurious builds are located near top schools (within the Issaquah and Lake Washington school districts), with easy access to the Bellevue business core, as well as the Mircosoft campus in Redmond. The city, which is noted as Washington’s richest city with a population over 5,000, is also home to abundant outdoor recreation opportunities, with nine parks and three golf courses, including the 27-hole Sahalee Country Club, and lakefront recreation on Lake Sammamish.
If Sammamish is making plans only to improve in its future, perhaps the best time to invest in this Eastside lifestyle is now.
ig harbor is one of Washington’s most storied destinations. Arrive by sea, like Captain Charles Wilkes who steered the captain’s gig into the harbor for protection during a storm (giving the town its name), or cross one of Washington’s most famous bridges—the Tacoma Narrows. While the city of Gig Harbor may be marked as the area immediately surrounding the harbor, unincorporated Gig Harbor should not be ignored. Together, this area offers a full, rich variety of residential homes across all price points and styles, though you’ll probably notice more Traditional and Craftsman styles than any others. In-city and neighboring county and state parks mean that outdoor escape is never far away. And whether a waterfront home is perfectly perched on the harbor, along Carr Inlet, facing Fox Island, or has Henderson Bay in its sights, the area is ideal for those who seek quintessential Northwest aquatic adventures. A Gig Harbor
commute to the business cores of Seattle and the Eastside, may be a lot for those who need to travel to the office five days a week. But for those who enjoy the flexibility of remote work or whose business takes them more often to the Tacoma business center, Gig Harbor’s easy distance to Tacoma is a major benefit.
For residents of Gig Harbor, the choice to call this beautiful setting home is about a connection to the community and a lifestyle that can be replicated by few other locales. Visit downtown for a walk along the waterfront. Standing at water’s edge, you won’t see the infinite expanse of other shorelines, but instead the hills and homes that look down on the water create a residential enclave all its own. You’ll see the unique vantages as you walk along Harborview Drive, stopping at local watering holes, bookstores, boutiques, and cafes.
Educationis
valued here, too. Gig Harbor schools are a part of the Peninsula Schools, a top 50 district in the state, and is in the top 10 districts for athletes in Washington.
While residents find comfort in the community, they will also discover there’s no shortage of activities. Play tourist in your own town, or explore the village before moving—join a dog-led truffle hunt on the peninsula, see the harbor from the water with a Venetian-style gondola ride, or take part in Pacific oyster monitoring. Of course, you could just head to the Tides Tavern for lunch, or meet your friends there after work for a beer, where you can soak in views of the harbor amid a vibe that’s more Cheers than fine dining. And that’s the beauty of Gig Harbor, in this small, tight-knit community, there’s an abundance of things to keep you busy and even more that offers serenity.
For residents of Gig Harbor, the choice to call this beautiful setting home is about a connection to the community and a lifestyle that can be replicated by few other locales.
otheby's International Realty releases its 2022 Luxury Outlook report, which identifies the trends likely to shape the world's prime housing markets in the year ahead.
Compiled by surveying Sotheby's International Realty agents around the world who transact in the US$10M+ price category. This information was complemented by gathering supporting data from other leading industry experts, including UBS Wealth Management; Henley & Partners, a global citizenship and residence advisory firm; the National Association of Realtors; in addition to art and luxury experts at Sotheby's, the famed auction house, to round out luxury trends in the year to come.
The global real estate advisors of Realogics Sotheby’s International Realty are local experts who live and work in the communities they serve, with deep knowledge of our swiftly moving market. They guide buyers and sellers to make advantageous decisions that will help them achieve their real estate and investment goals. Offering the Puget Sound’s quintessential innovation along with award-winning marketing and backed by a talented team who goes above and beyond, these global real estate advisors are committed to uniting more buyers and sellers year after year.
For expertise that reaches down the block and around the world, there’s Realogics Sotheby’s International Realty.
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