Image courtesy of Flickr, Richard Ha
Seattle home prices won't be slowing down any time soon. Here are some reasons why Seattle will continue to be a hot market in 2017.
The Seattle housing market has been on fire for the last few years. You've probably noticed an uptick in headlines and media coverage as home prices in this popular West Coast city have hit all times high and continue to climb.
According to Zillow, Seattle home prices have gone up 14.1% just in the last year and are expected to rise another 6.4% throughout 2017. The graph below shows just how much home prices have climbed since the market crashed:
In this article, we explore Seattle's recent popularity and predict what the market will look like in 2017.
In recent years, a growing wave of money from China and other foreign countries has been pouring into the Seattle-area housing market, contributing to the city's growth and rising home prices. Better education and new opportunities are just some of the reasons that the Chinese are looking to migrate to America, as well as these following benefits:
The Chinese are very passionate about the education that their children receive. They want to offer their children the best education possible.
You may be surprised to hear that the American education system is the top rated in the world, prompting parents to plan their move before their children are even born.
First-tier cities in China, such as Beijing and Shanghai, are incredibly expensive. As people flock from their hometown to bigger metro areas, this drives up housing premiums. In some cases, housing costs could exceed those in Manhattan Island!
As inflation continues to rise in China, the prices of food and other basic necessities continues to rise as well. This encourages many Chinese individuals to move to America.
Own their Land
It may come as a surprise, however, in China, when someone buys their property, they can only lease it from the government for 99 years. This is a newer policy and it isn't quite clear what happens after the 99 years are up.
Buying property in America means you own the land rights outright. This is very attractive to the Chinese and has caused many individuals to seek living arrangements within the US.
A recent tax on international buyers in Vancouver, B.C., has further pushed home seeks from China to new areas of America, which has resulted in more interest in the Seattle area. In fact, Seattle saw more inquiries from mainland-Chinese homebuyers than any other American city in the last 6 months.
British Columbia enacted a 15 percent tax on foreign buyers in the Vancouver metro area. This forced Chinese homebuyers to look elsewhere. When this tax was enacted, searched by Chinese home seeks for Seattle have more than doubled, while they've been cut nearly in half in Vancouver.
Local officials in B.C. pushed for the foreign-buyer tax, hoping that the tax will help longtime residents and control rising home prices. Vancouver would typically see prices soar more than 30 percent in a year.
Housing data indicated that foreign nationals spent more than $1 billion on British Columbia property between June 10th and July 14th alone. The tax is thought to reduce the overall housing stock in order to control homes affordability.
Another reason that Seattle's housing market has been on fire is because of its bustling job market.
In 2014, Seattle raised the minimum wage to $15 per hour in a tiered roll-out, however, this has little to do with Seattle's booming labor market . Instead, Seattle has experienced a growing tech-sector and construction industry. In fact, many individuals seeking a career in the tech industry are moving to Seattle, as show in this graph via Innovation that Matters.
Experts note that Seattle's robust population, educated millennials and skilled tech workforce make it a powerhouse when it comes to attracting top talent. Additionally, Seattle has also become an area of impressive start-up activity.
When relocating, many individuals take into consideration other big West Coast hot spots like San Francisco. Although home prices have been soaring in recent months, housing costs remained far lower than peer West Coast hubs or other international hot spots.
Compared to Silicon Valley or San Francisco , home prices in Seattle were significantly lower than other metro areas. When the Chinese look at Seattle, they think it's an amazing deal, while local buyers struggle from the overseas interest and competition.
Signs are clear that Seattle Housing Market is not slowing down anytime soon. The influx of Chinese immigrants and the new foreign taxation policy in British Columbia are the main contributors to Seattle's incredibly growth.
Many analysts agree that Seattle's real estate market stands out from the pack. Veros Real Estate Solutions, a California-based company that specializes in property valuations and analytics, published a real estate market forecast for major metro areas across the US:
''The top forecast markets are showing appreciation in the 10% to 11% range with the Pacific Northwest and Colorado having a lock on 8 of the top 10 ... Seattle, Wash. (+11.2%), Portland, Ore. (+11.1%), Denver, Colo. (+9.9%) and other metropolitan areas in these same vicinities appear very strong over the next year.''
Seattle home prices won't be slowing down any time soon. The popular West Coast area has become an incredibly valuable place to live. If you are looking to move into the Seattle market, it's important to consider your own financial situation, as well as the economy as whole. To help you with your search, you can compare hundreds of mortgage rates at once, in the first and only do-it-yourself mortgage marketplace. See rates now on BeSmartee.com.
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