Seattle – Bellevue Real Estate Market Update

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19 homes have sold for $2 million
or more in the Seattle area this year, including an historic mansion

  • It’s increasingly common for homebuyers to pay $2 million or more for a single-family home in King County.
  • There were 19 homes that sold in King County in January and February for at least $2 million.
  • That was 15% of the 127 homes that sold for at least $1 million, according to public records listing recent real estate transactions.
  • The $2 million home were bought across the region, including Seattle, Bellevue, Issaquah, Shoreline, Mercer Island, Kirkland and Woodinville.  They include new construction and one historic mansion.
  • The median sales price is up 15% in King County and 10% and 11% in Pierce and Kitsap counties, respectively.
  • The median price of a single-family house in King County now stands at $560,000.
  • That’s double the $280,000 in Pierce and Kitsap counties and 36% more than Snohomish County’s $412,500 median price.
  • The number of homes for sale will increase as the spring selling season begins, but with that will come more buyers.

Apartment landlords sue Seattle over new ‘first-in-line’ tenant rule

  • Some small-time apartment landlords on Thursday sued Seattle over the city’s new rule that mandates they rent to the first qualified tenant who shows up.
  • By denying owners the freedom to choose among qualified applicants the “first-in-line” rule violates state constitutional protections for property rights, according to the lawsuit that the Pacific Legal Foundation filed in King County Superior Court.

Three new Bellevue office buildings are hubs for tech companies and changing the downtown workforce

  • When you think about the ways downtown Bellevue is changing, what comes to mind?  More shops? More restaurants? More residents?
  • How about a different type of office worker?  A trio of downtown office towers has recently opened, ushering in the latter – a wave of tech employees.
  • “I’ve been leasing space for 30 years in downtown Bellevue,”  said Paul Sweeney, principal and cofounder of The Broderick Group.  “When I first started, we were always targeting CPA’s and law firms.  Not anymore.”
  • In January, the San Francisco based cloud computing and software company Salesforce held a ribbon-cutting ceremony to mark the opening of its three-floor, 70,000 sq/ft office in the new 19-story, 462,000 sq/ft – 929 Office Tower.
  • In February, the mobile advertising firm AdColony prepared to move into approximately 26,000 sq/ft on the 929’s 14th floor.
  • Centre 425, a 16-story, 354,000 sq/ft tower developed by Schnitzer West, opened this year and is home to a single tenant:  Amazon
  • And tenants began moving into the 31-story, 750,000 sq/ft Lincoln Square Expansion office tower in late January, including video game developers Valve Corp. – floors 11-19.
  • Pokemon – floors 26-29 @ 80,000 sq/ft
  • and the consumer electronics company Samsung – 21st floor @ 25,000 sq/ft.

Expedia to keep satellite office in hometown of Bellevue after departing for Seattle in 2019

  • Expedia confirmed that it plans to keep at least a chunk of office space in its current hometown of Bellevue behond the timeline of its 2019 departure across Lake Washington with a final destination of the Seattle waterfront.
  • The travel giant has agreed to extend a lease at a building called Skyline Tower in Bellevue to hold onto three floors of office space totaling 55,000 sq/ft until at least 2022 with room for about 500 employees.
  • Instead of a fixed office for certain teams or employees, the space will be available for employees to book for a certain amount of days per month.
  • They found that there was a desire to keep some space on the Eastside as an option for employees as we transition to Seattle.
  • Though the move raises Expedia’s cache locally by giving it a signature headquarters, it will also drastically increase the commutes of many employees.
  • Expedia also has eventual plans for “Phase II” and “Phase III” that could expand the campus to 1.9 million sq/ft and accommodate up to approximately 8,000 employees.

Taller buildings proposed for more of Seattle in exchange for affordable housing

  • Downtown Seattle and South Lake Union are the next neighborhoods where Mayor Ed Murray wants to allow taller buildings in exchange for help with affordable housing.
  • Under the proposed upzone, new projects would be allowed to climb one or several stories higher, depending on location.
  • In some cases, projects would be allowed more floor area.
  • The upzone would trigger the city’s new Mandatory Housing Affordability program, which requires developers to include rent-controlled units in their projects or pay fees to help create such units elsewhere.

PGIM Makes $362.4 Million Investment in Kirkland Urban

Kirkland Urban

  • New Jersey-based PGIM Real Estate has made a $362.4 million investment into the Kirkland Urban mixed-use development project in Kirkland, according to a board meeting document from the Ohio Bureau of Workers Conpensation Board.
  • Upon completion, Kirkland Urban will be a trophy caliber mixed-use development in a well-established community and a strong long-term investment for our clients.
  • We are pleased to partner with Talon and Ryan to Bring a high-quality, modern office space and apartment, and a new retail destination to Kirkland.

Southport, the largest mixed-use construction project underway in Renton

Renton WA Southport Development

  • Southport is inching closer to completion and could soon look more like the waterfront urban village its developer envisions
  • SECO Development purchased the 17.1 acre site from Puget Sound Energy in 1999 for approximately $7 million, and has since developed it in phases.
  • The five-store, 383-unit Bristol I and Bristol II apartment buildings werer completed in 2002 and 2006, respectively.
  • The 12-story, $180 million, 347 room Hyatt Regency Lake Washington is scheduled to open in June.
  • And three nine-story, $350 million office towers scheduled to open between July 2018 and January 2019 will offer approximately 700,000 sq/ft of Class A office space.
  • The campus will also feature a range of retail shops and restaurants.
  • In the end, the $590 million Southport project aims to be a game-changer for Renton, and a campus bustling with thousands of office workers, apartment residents, and hotel visitors.

Alaska Airlines expects to hire more than 2,300 people in 2017

  • Alaska Air Group Inc. expects to hire more than 2,300 people this year for front-line jobs at Alaska Airlines and Horizon Air.
  • The fast-growing airline already employs 15,600 workers and recently completed its $2.6 billion takeover of California-based Virgin America.

Last new finished downtown Seattle condo sells

  • They’ve sold the last new condo at the two-tower Insignia condo project in downtown Seattle.
  • The news comes nearly five years after construction started on the 698-unit project, and it means the urban core is back to having no finished new-construction units available for sale.
  • Another tower project, the 168-unit Luma project on First Hill, sold out several months ago
  • Approximately 13,000 new housing units have been delivered in downtown Seattle since 2011, but only 6% of these units were for-sale condos and the rest rental apartments.

Bothell finally gets its wish:  new homes for sale in its revamped downtown

  • A Kirkland-based real estate company, MainStreet Property Group, says it has sold a large property in downtown Bothell, where the buyer will build 45 high-end townhouses.
  • MainStreet announced the deal with homebuilder Toll Brothers, which bought the nearly 2.2 acre site at 9654 N.E. 182nd St.
  • The property, which is where the City Hall annex building stood before it was demolished, is next to the Bothell Library.
  • Toll (NYSE:TOL) paid $8.55 million for the property, according to public records.  MainStreet had acquired the site from the city for nearly $3.4 million, and went through the process of entitling the property for development.
  • Toll’s project will be the first for-sale housing development in the neighborhood since Bothell launched its major downtown makeover which included the city buying up 25 acres of land and selling off parcels to developer.

Seattle ‘passive house’ design firm is tops in North America

  • To design cutting-edge projects takes a well trained team, which is why NK Architects of Seattle has ramped up its education effort around “passive houses”.
  • Passive-house design is a super-green building technique that relies on extra insulation and high-performance windows.  It can cut heating and cooling loads by 90%.
  • NK believes demand for passive houses will grow significantly, so it has invested in getting 21 employees certified as passive house consultants and designers.
  • That’s the most of any firm in North America.

The largest Tech Companies in Washington

  1. Microsoft 45,431           114,000 globally
  2. Amazon    40,000         341,000 globally
  3. Expedia      3,500
  4. Centurylink 2,130
  5. Google          2,000
  6. Facebook      2,000          17,048 globally
  7. Tableau        1,700
  8. F5 Networks  1,376
  9. Accenture       1,271        394,000 globally
  10. Zulily               1,250
  11. Apple               1,200
  12. Zillow              1,190

Housing inventory reaches record low, but brokers expect spring bounce

  • Home buyers are in a spring mood, but sellers are still hibernating, suggested on broker while commenting about the latest statistics from Northwest Multiple Listing Service.
  • Figures for February and feedback from brokers indicate record-low inventory is spurring multiple offers, rising prices, fewer sales, and frustrated house-hunters.
  • Year over-year pending sales (mutually accepted offers) declined for the first time since March 2016, falling 8.9%.
  • Eight counties, including King and Snohomish, reported double-digit drops in pending sales as the volume of new listings couldn’t keep pace with demand.
  • During the past three months, broker have added 17,572 new listings to inventory, down only 5.7% when compared to the same three-month period of a year ago.  During the latest December-to-February timeframe, MLS members reported 22,393 pending sales, far outpacing the number of new listings.
  • Our robust market has created extreme conditions, and we’re seeing frenzy hot activity on each new listing coming on the market.
  • We’re also experiencing some of the lowest inventory levels on record.
  • In fact, a check of the Northwest MLS records dating to 2004 shows no other month when the number of active listing dipped below the 10,000 mark – until last month.
  • At the end of February, there were 9,091 active listings in the Northwest MLS system, which encompasses 23 counties.  That represents a drop of nearly 25% from the year-ago total of 12,107.
  • Sellers are frustrated when they cannot find another home to match their current needs, or when a home goes off market so fast that the option of a contingent sale is not even considered.
  • Brokers believe seasonality is a factory, with several saying they are expecting an uptick in listings.
  • Sellers that have come to market ahead of the traditional spring market are reaping the benefits of less competition (from others who are selling) and a highly competitive buyer pool.
  • Kitsap County is seeing an increase in investor type buyers as they anticipate the impact of the new fast ferry system, now in the beginning stages of roll-out.
  • Access directly to Seattle on a fast foot ferry will have a large impact on Kingston, Bremerton, and Port Orchard, while hopefully reducing the pressure on the Bainbridge Island terminal.
  • Home sellers are benefiting from the perfect storm of market conditions, but as the ongoing low inventory levels and precipitous drop in pending sales indicate, there simply are not enough homes to meet the demand of buyers.
  • All of this is pushing up home prices faster than anywhere else in the country and will continue to do so if we don’t see more homes come on the market this spring.
  • With less than a two month supply of inventory, we will continue to see price escalation.
  • Prices on closed sales of single family homes and condos in Kitsap County are up 10% from a year ago.
  • That county has about 1.4 months of supply, third lowest among the 23 counties in the MLS database.
  • Both King and Snohomish County had less than one month of supply.  Area-wide there was about 1.7 months of supply
  • Year-over-year prices are up nearly 8.9% area-wide, with 13 counties reporting double-digit gains.
  • The media price for last month’s 5,374 closed sales of single family homes and condos (combined) was $335,000.
  • Closed sales volumes rose nearly 6.9% from a year ago.
  • In King County – one of only four counties where the volume of closed sales fell from a year ago- prices jumped 14.5%, climbing from $439,950 to $502,000.
  • Despite the drop, King County’s year-to-date total of 3,803 closed sales is running 7.3% ahead of the first two months of 2016.
  • System-wide, the number of completed transactions for January and February is up 12.3%
  • The figures indicate the “fast pace, high velocity market” will continue to grow in 2017.
  • For single family homes (excluding condos), the median selling price in King County was $560,000.  That’s a gain of more than 8.7% from the year-ago figure of $514,975.
  • Snohomish County prices spiked more than 18.2%, rising from $327,500 to $387,250.
  • For single family homes only, prices in that county increased 14.9%, from $359,000 to $412,500.
  • At this point it appears that those seeking to stay in ‘commuter counties’ that surround the job hub of King County have the best opportunity to do so in Pierce County.
  • “However”, he noted, “inventories in Pierce County are shrinking at a high rate as well (down nearly 24%), suggesting that demand is pushing southward to Tacoma/Pierce County.
  • The median price on last month’s sales in Pierce County rose to $274,950 from $249,250 for a gain of 10.3%.
  • That’s about 55% of the price in King County ($502,000)
  • Single family home prices (excluding condos) in Pierce County ($280,000) were half the price of King County ($560,000).
  • Area-wide prices on last month’s completed transactions for condo sales rose 6.2% from a year ago, increasing from $275,000 to $292,000.
  • Condo inventory plunged 33.2%, most notably in King County where brokers reported a sharp drop, at 41.5%.
  • At month end there were only 759 condos listed for sale, down from the year-ago total of 1,136 units.

Sales Summary

NWMLS Pending Sales February 2017

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