Real estate. It can be a rewarding investment if you spend your time with it properly.
Over the years, Seattle has become one of the most interesting real estate markets in the country. As of 2022, the median home price in the city is around $840,000.
With homes getting closer and closer to a million dollar median home value, some people may want to get in on Seattle real estate at the current price. However, those that have done their homework on real estate are probably aware that there are other parts of the country seeing good real estate results as well.
So, the question is, what makes Seattle stand out? Why should this city be the place where you start investing in real estate?
Here are five of the biggest benefits that you will see.
1. Steady House Price Growth
The first reason why you should consider buying real estate in the Seattle area is that the city can offer you a steady and consistent real estate market. What does this mean?
It means that for practically the last decade, Seattle’s housing market has only continued to grow. According to this report from the National Association of Realtors, Seattle’s housing market has increased every quarter here for the past eight years.
This means that Seattle has shown you a proven track record in recent years that your real estate is only going to increase in value. Let’s take a look at some specific numbers here if you do not believe us.
By the end of 2013, the median value of a house in Seattle was a mere $350,000. Yet, that was still an increase from the beginning of that year, when it was barely over $300,000.
Let’s fast forward to the end of 2019. This is right before the pandemic when the housing industry really took off.
By then, houses were sitting at around $550,000. It stayed like this for another quarter or two until the demand for homes went up across the country. At the beginning of 2022, a house in Seattle was worth just under $750,000.
As you can see, this growth in housing prices is nothing to sneeze at in Seattle. Considering it has gone up by almost two and a half times the value in just under nine years, this could be a great long-term investment for you if you can play your cards right.
2. Good Percentage Increases
To play off of the point above, Seattle is not just seeing tremendous growth in its home value. The city’s housing market is providing a consistent return on investment.
As stated above, the Seattle real estate market has increased in value every quarter for over eight years in a row. This means you are getting consistent profit, and for a while, Seattle investors have not had to worry about losing money through all of this.
Some may be worried that the pandemic may have meant the peak of the real estate market. There is an argument to be made against this when you look at the growth every quarter has had.
There is a chart in the report above that shows what percentage of each quarter saw growth in the median housing value. You can see that between late 2020 and late 2021 had the most significant growth, ranging from 15-25%.
However, 2022 still looks to be going strong if the first quarter says anything about it. That is because it went up by about 14% that quarter.
It is not the only quarter to do this, with late 2017 and 2018 quarters matching this as well. What does this mean?
It means that you could see a significant profit in one quarter. Let’s say you buy a real estate property in Seattle for about $750,000. Then, it goes up by about 15% in six months.
Suddenly, your property goes from being worth $750,000 to being worth over $862,000. Not bad, considering you hung onto that property for less than a year.
3. Housing Construction Trends
Another thing that you should take note of when it comes to the Seattle real estate market is the trend of house construction. This has been interesting to follow throughout the country because, during the pandemic, there was a notable shortage of houses to go around.
This means that if there are not enough houses being built, there is not sufficient housing supply to meet demand. Well, the Seattle area has a much bigger problem in that area than the rest of the country.
Seattle only builds a little over 8,000 houses at any given time. That is about 9.7% below the national average. On top of this, Seattle has one of the biggest populations in the country.
So, not only do they build nearly 10% fewer houses than the rest of the country, but they have a large population that is demanding said houses.
As of 2022, Seattle is estimated to have just under 763,000 people residing in its metropolitan area. That ranks 18th in the entire country.
If you do the math, you will realize quickly that building so few new houses per year may not be enough to satisfy the growing population. Part of the reason for this is that since the 2020 Census came out, the population has increased by 25,000 people in Seattle.
So, if there is an assumption here that Seattle does not have enough housing to keep up with the increasing population in the city, that means new housing cannot meet demand. Thus, it can mean an opportunity for a real estate investor to see an increase in their property’s value.
4. Hot Neighborhoods
One benefit of aiming for a certain city is the fact that you can take advantage of surging neighborhoods. Seattle is no different than most major cities, with certain neighborhoods within the metropolitan area that are worth keeping an eye on.
This report highlights a few of the neighborhoods that are on the rise in 2022. The top one that is worth keeping an eye on as an investor is Queen Anne and Magnolia.
The main benefit of this neighborhood is that when it comes to single family properties, the year-over-year growth here is nearly 35%. On top of this, the overall price growth from the area was about 15%.
In this neighborhood, a home is worth nearly $900,000. However, this is not the only neighborhood in the Seattle area that is worth keeping an eye on.
The second neighborhood that was mentioned as a rising one in this report was West Seattle. It does not have quite the growth that Queen Anne and Magnolia do, but it is still seeing about a 9% growth over the last year.
Right now, the median housing price is about $765,000 in that neighborhood.
SoDo and Beacon Hill are showing similar signs of growth as West Seattle. Over the last year, it has seen a nearly 8% increase. This is a bit of a cheaper area to invest, with the median home value being around $714,000.
5. Passive Income
While this does not pertain just to Seattle, it still can be a great reason to invest in the area. If you are certain that you can see some steady returns on your investment, you have the opportunity to do this from home.
For example, say you live in New York City and like the real estate opportunities in the Seattle area better. If you hire a property management team, they can handle the daily needs of your property while you relax from your own home.
You may not even have to be in the city when you buy the property. This can be great for people that are looking to have some passive income. To do this, they need to be sure that the investment property will keep spitting out profits.
If you read the numbers above, you should gain more confidence that the Seattle area can do this for you. So, for those that want to start developing a passive income stream and go live somewhere else, this can be a great way for you to do it.
Invest in Seattle Real Estate
These are just five of the benefits that you can have when you invest in Seattle real estate. You can use this as a way to develop passive income for yourself.
How can you do this? Figure out what neighborhoods are hot, see what the home construction trends are, and see if there is consistent growth in the housing market or not. If you do all of this, you can see yourself getting a good return.
Are you ready to get started? Message us today to see how we can help.