Flurry Of Luxury Condos Selling In Seattle and Bellevue. 3 Reasons Why It Will Continue
In the last 14 days there has been a flurry of luxury condos selling in Seattle and Bellevue. There are 3 reasons why I think we have seen units like this sell and why we should anticipate strong sales through the election next year:
Seattle’s unemployment rate is 2.8% (source. Bureau of Labor Statistics). When you compare that with NY (4%) and LA (4.4%) it looks quite good. We have new headlines daily about job growth, new startups, major employer expansion and long term housing growth. One could argue that Seattle has the most robust & diverse economies in the country.
Regional Competition – Traffic, Land Grab & Schools
One interesting storyline is how traffic patterns, available land and school districts are benefiting Bellevue (Seattle). For those of you not aware, Bellevue is approximately 18 minutes to the East of Downtown Seattle. Bellevue has been a major storyline for the last 3 years. There are 2 floating bridges that connect Seattle to the Eastside (Bellevue).
Available Land – Bellevue still has room to grow. There are development sites and land opportunities that don’t exist in the Seattle Downtown core. This has given major employers options as they acquire more dirt and sign long term leases in Bellevue versus Seattle.
Schools – One signifcant economic driver for the Seattle region and Bellevue specifically are the schools. The Bellevue school district is fantastic. A lot families will move to Bellevue to get their kids enrolled in top rated schools. This explains the massive move in the median sales price of Bellevue homes/condos. The median sales price in Bellevue last summer hit $2.6m
Politics – One final case made for Bellevue is the political climate. Seattle has city politics that have driven some lifelong residents to move. Bellevue provides a much more centrist political environment and the city has benefited from very little homeless. Something that has plagued Seattle and the City Council for years. Bottom line is, as Bellevue grows, so does the overall economic expansion in the Seattle region.
Lack Of Inventory
Despite an increase in inventory and being off its historic lows, inventory in Seattle/Bellevue is well below most other major US markets. There are a number of reasons for that. Specifically in the condo market, it really boils down to the Washington Condo Act. The WCA in summary was created and revised to protect consumers. It put strict development standards on condo developers and ultimately led to a wide variety of lawsuits aimed at those Developers and insurance companies. The rise in lawsuits and the profitability in Apartment development, led many condo developers to pass on building high rise condominiums. This led to an extreme shortage of available condos over the last decade. The shortage of inventory and rise in demand created a 6-8 year expansion in Real Estate prices.
In Summary, as Seattle continues to evolve as a major player in the Global economy, expect urban density to follow. I expect Seattle to be one of the best domestic economies for years to come. Take a look at some of the companies that make up the Seattle/Bellevue job market
So as you see luxury condos continue to sell and home prices back on the rise, look no further than the local Seattle economy. Until that changes, the market should continue to expand.