Another banner year for the region has brought tremendous prosperity across a breadth of industries, a wealth of new jobs, flourishing tourism, and the welcoming of several large businesses into our cities.
So, how is the Eastside poised to begin a new decade? Will this growth continue? To find out, 425 Business ditched the crystal ball and talked to Eastside movers and shakers across myriad industries to find out what they believe the year ahead holds.
Residential Real Estate
The Eastside residential real estate market is going to experience significant growth in the next few years. Amazon, Google, Facebook, and other tech giants are rapidly expanding their footprint to the Eastside. Thousands of tech workers relocating to this area, along with new hires for supporting businesses (such as retail and restaurants), will greatly increase the demand for housing. This year, almost half of the buyers who walked through my open houses were relatively new in town.
Condos under $750,000 and single-family homes under $1.5 million will sell very quickly if they are in good condition and priced right. Also, homes with easy access to public transit and future light rail stations will become more and more desirable. Areas in and near downtown Bellevue and downtown Kirkland will still be the hottest submarkets because they are job centers with superb amenities.
– Mei Yang, global real estate adviser and broker at Realogics Sotheby’s International Reality
Commercial Real Estate
(The current) cycle exhibits some significantly different conditions from those that precipitated the “thrift crisis” of the ’80s; the dot-com bust of the ’90s; or, certainly, the “Great Recession” of the last decade. Interest rates are lower, equity is plentiful, and expectations for return on equity across all asset classes are significantly less expensive.
Federal taxes and punitive regulations are generally lower (unfortunately, we can’t say that about state and local), and corporate earnings are remarkably strong (yes, with a few notable exceptions) despite tariffs and turmoil. Perhaps most important is the fact that employers across all sectors are scrambling to attract workers and have tens of thousands more openings to be filled.
My belief is that real estate economics is pretty simple — it’s all about employment. If you have healthy job creation, everything works. It attracts more residents who need housing, businesses that need more lawyers and accountants, kiddos who need teachers, demand for groceries, and so on. Conversely, if employment flattens or falls, the economy constricts.
Bottom line: If you can tell me when Eastside employers are going to quit hiring or start laying off, I’ll tell you when commercial real estate on the Eastside is going to suffer. Until then, land prices and rents on existing buildings will continue to rise, and developers will race to provide the office, apartment, and retail space to support the growth.
– Robert Wallace, CEO of Wallace Properties
Bellevue has a ton of local transportation improvements on tap for 2020 that will make travel safer and easier for thousands of residents. But we’re also excited about the work we’re doing with our regional partners. It has the potential to benefit hundreds of thousands of people in the coming years and will be a big boon for transportation options on the Eastside.
Bellevue and Kirkland are working with King County Metro on a new RapidRide K Line that will connect the Eastgate Park & Ride in Bellevue to the Totem Lake Transit Center in Kirkland starting in 2025. And King County Parks is working with several Eastside cities on Eastrail, a regional pedestrian and bicycle path.
On the roads side, the state Department of Transportation will break ground in 2020 on the I-405 Renton to Bellevue Widening and Express Toll Lanes project. It will add capacity, boost transit options, and improve safety on one of the most congested stretches of highway in the state.
– Andrew Singelakis, transportation director for the City of Bellevue
Next year, I see healthcare in general (and EvergreenHealth) placing an increased emphasis on access — both in the traditional sense and through innovative alternatives. The ever-permeating digital age provides care for patients through new approaches with even greater creativity and efficiency. We also will have the increased benefit of effective solutions, possible through new sources of data analysis and other breakthroughs.
As always, we’ll collectively prepare for the needs of an expanding senior population, offering valuable services to help them sustain their well-being and healthy, active lifestyles.
Finally, we are committed to collaborating with our schools and others, supporting care for students with behavioral health issues.
– Jeffrey J. Tomlin, CEO of EvergreenHealth
Bellevue and the Eastside’s tourism and hospitality industry is positioned for continued growth. Demand is projected to increase due to the growing corporate presence on the Eastside, a strong consumer economy, healthy airline capacity, and popularity in the Pacific Northwest as a destination. In recent years, the Puget Sound region has seen significant hotel supply increases, which have caused property rates and occupancy to level out, but we are hopeful that this additional demand will offset the recent inventory surge.
As a whole, travel growth in large technology markets like San Francisco, San Jose, Seattle, and Vancouver have recently slowed, compared with previous years. With that said, many business travelers now book rooms and visitor experiences outside of the large city centers — which positions areas like Bellevue and the Eastside well for 2020 and beyond.
– Brad Jones, executive director of Visit Bellevue Washington
(Next year) is the year that cybersecurity will turn inside-out. Malware, ransomware, and phishing attacks are all significantly on the rise, and (historically) 61 percent of data breach victims have been small businesses. These businesses can no longer rely on legacy tools like antivirus and networks that only protect them at the office.
Security must go mobile and leave traditional technologies behind. It’s also time to eliminate SMS-based authentication in favor of hardware keys that support Universal Two Factor authentication.
– Riley Eller, chief technology officer at Rubica
We expect the rapid growth of technology companies of all sizes based on the Eastside or expanding their operations to the Eastside to continue, many of which will be focused on intelligent connectivity, including 5G, AI, IoT, and Quantum computing. With that, we expect to see more regulatory attention on consumer privacy and data usage.
This regulatory attention will increase the demand for legal service providers, especially those who have a stake in the Eastside community and a desire for more personal interaction with their clients.
– Barry Stulberg, counsel, and Carly Chan, associate, Davis Wright Tremaine’s Bellevue Office
Eastside residents and business owners should have a plan in place for when times are good and when times are bad, regardless of the Federal Reserve’s actions. The Fed cut rates by 25 basis points, to 1.5 percent (from) 1.75 percent. This means that the Fed is helping prolong the economic expansion. The Fed is not expected to reduce rates further in the coming year, barring a recession. However, consumer confidence fell for a third straight month (as of Nov. 1), and consumers have not shown signs of slowing down.
Fed rate cuts to prop up an otherwise-slowing global economy generally mean that they are prolonging the inevitable — a recession. However, the bigger effect is to Americans saving for later. Because of low interest rates, American consumers are forced to take on more risk than necessary to make their money work for them. It would be prudent to include in one’s portfolio insurance and real estate to complement their investment portfolio.
Because of the technology industry and the various Silicon Valley companies coming into the Seattle-Eastside area, our economy will not be as affected as other economies when we experience a recession.
Clients at local technology companies have indicated that hiring has slowed down, and jobs that were eliminated aren’t being replaced with new workers. This can mean they are bracing for a possible recession or slowdown in the economy.
Consumer confidence is still not at a level where they are pulling back from spending; this explains why housing is still strong in the area and consumers are stretching their budget to buy into a hot real estate market.
Restaurants in the area are feeling the effects of a low interest rate environment, which generally follows inflation of raw materials and commodities. It is evident in the exorbitant prices we are experiencing when we go out to eat.
– Tony Sablan, wealth manager at Eagle Strategies LLC
This article was originally posted on 425 Business.
The market in our region appears to be moderating. Inventory is up, prices are relatively stable and homes are taking a bit longer to sell. However, with less than two months of available inventory, supply is still far short of demand. Steady buyer activity, low interest rates and a thriving economy are making for a strong summer in the housing market.
The median price of a single-family home on the Eastside was $950,000 in June, down 3% from the same time last year and up $21,000 from May. Many buyers are looking to take advantage of the Eastside jobs boom with Amazon announcing plans to build a 43-story tower in Bellevue and Google expecting to reach 1 million square feet of office space in Kirkland.
There was good news for buyers in June as a growing supply of homes helped boost inventory close to 2012 listing levels. The median price of a single-family home in King County was $695,000. That figure is a 3% drop from a year ago and virtually unchanged from May. 33% of homes sold above list price; another sign prices are moderating when compared to 52% of homes sold over list price this time last year.
Home inventory in Seattle inched slightly higher in June. However, with less than two months of supply, the city is still a solid seller’s market. Apple’s plan to turn Seattle into a key engineering hub can only add to demand. The median price of a single-family home in Seattle was $781,000, down 4% from a year ago and nearly unchanged from May.
After hovering around $500,000 since March, home prices in Snohomish County crept up in June. The median price of a single-family home was $515,500, as compared to $511,500 last June. Snohomish County continues to attract buyers priced out of the King County market, putting an additional strain on supply which stands a just 1.5 months of inventory.
This post originally appeared on GetTheWreport.com
The real estate market continued to improve for buyers in November. Interest rates dropped slightly, price increases slowed and inventory soared. It’s important to note that inventory increases, while significant, are being compared to the record low supply of last year. We’re still far short of the inventory needed for a truly balanced market, however buyers have greater choice and less competition than they’ve had in years. Sellers who price their home according to current market conditions continue to see strong interest. Heading into the holiday season, there’s something for everyone to celebrate.
The Eastside economy continues to be very strong. Heavy investment in commercial construction from companies such as Vulcan boost expectations that the area will continue to thrive. The median price of a single-family home in November hit $885,000 on the Eastside. Although an increase of 4 percent from a year ago, home prices have remained steady since this fall. With continued demand and only 2.4 months of inventory, the market has a long way to go to becoming balanced.
Price increases continued to slow in King County. The median single-family home price was $643,913 in November, an increase of 2 percent over a year ago. South King County, where the most affordable homes in the county are located, saw significantly greater increases compared to a year ago. North King County also posted greater increases than the county overall. Inventory has skyrocketed as the number of homes for sale in King County more than doubled year-over-year. While that’s good news for buyers, there is only 2.1 months of available inventory in the county, slightly down from October and not nearly enough to meet demand.
The median price of a single-family home in Seattle was $760,000 in November. This is up 3 percent from a year ago and slightly up from October. Inventory jumped 177 percent year-over-year however, at just two months of supply, the Seattle area has the tightest inventory in King County. With the city’s strong economy and lifestyle appeal, that’s not expected to change any time soon. Forbes recently named Seattle as the best place for business and careers in the nation. U.S. News & World Report ranked the University of Washington among the top ten universities in the world with Money Magazine rating Seattle the #5 Best Big City to Live In.
Inventory in Snohomish County continued to climb, surging 88 percent in November as compared to a year ago. That said, the area has fewer homes for sale than King County with just 1.8 months of inventory. This is still far short of the four to six months of supply that is considered a balanced market. The median price of a single-family home sold in November was up 6 percent from last year to $470,000, virtually unchanged from October.
This post originally appeared on the WindermereEastside.com blog.
It appears that balance is slowly returning to the local housing market. Home price growth slowed in September. Inventory continued to climb, but is still far short of the four to six months that indicate a normal market. Homes are staying on the market longer, giving buyers the breathing room to make the right choice for their situation. With our region’s healthy job growth, and demand still exceeding supply, it’s likely to take some time to move to a fully balanced market.
Home price increases moderated into the single-digits in September. The median price of a single-family home on the Eastside was up 4 percent from the same time last year to $890,0000 but down from a median price of $935,000 in August. Inventory increased significantly and price drops jumped. While the market is softening, the recent expanded presence of Google and Facebook on the Eastside means demand should stay strong. In addition, the area’s excellent school system continues to be a large draw for buyers both locally and internationally.
Inventory was up 68 percent year-over-year in King County due to a higher number of sellers listing their homes and fewer sales. There is now more than two months of inventory in the county, a number we haven’t seen in nearly four years. Despite the increase, there is a long way to go to reach the four to six months of inventory that is considered balanced. In September, the median price of a single-family home was $668,000; an increase of 7 percent from the same time last year and virtually unchanged from August.
Inventory in Seattle surged in September from a year ago. Only San Jose, CA saw the number of homes for sale rise faster than Seattle last month. The median home price in September was $775,000. Up slightly from the $760,000 median price in August and a 7 percent increase from last year. The double-digit price growth of past years appear to be waning and overzealous sellers who listed their homes at unrealistically high prices have been forced to reduce them. Bidding wars have declined and the typical well-priced house is now selling right at asking price.
While not nearly as dramatic as the case in King County, inventory in Snohomish County was up 40 percent. The area has just over two months of inventory with home prices moderating. The median price of a single-family home increased 8 percent over a year ago to $485,000. That’s down from the $492,000 median reached in August and $26,000 less than the peak of the market reached in spring.
This post originally appeared on the WindermereEastside.com Blog.
The local real estate market looks like it might finally be showing signs of softening, with inventory up and sales down. More sellers have opted to put their homes on the market. Inventory was up 47 percent in King County and price increases were in the single digits. Despite the increase in inventory and slowdown in sales, it’s still a solid seller’s market. Over half the properties purchased in June sold for more than list price.
A booming economy offered little price relief for buyers looking on the Eastside. In a recent study of economic strength by state, Washington ranked number one in the country. An additional report targeting cities ranks the Seattle-Bellevue-Tacoma market as the nation’s fourth strongest economy. The median price of a single-family home on the Eastside rose 10 percent over a year ago to $977,759 setting another record. There is some good news for buyers. Inventory rose to its highest level in three years, with the number of homes for sale increasing 46 percent from the same time last year.
The number of homes on the market in King County soared 47 percent from a year ago, the biggest increase since the housing bubble burst. Despite the increase, there is just over one month of available inventory, far short of the four to six months that is considered a balanced market. The median price of a single-family home increased 9 percent over last June to $715,000. That’s down 2 percent from the $726,275 median in May. Home prices haven’t dropped from May to June in King County since the last recession.
Seattle trails only Bay Area cities when it comes to greatest profits for home sellers. That may help explain the surge in inventory in June. For example, the number of homes for sale in the popular Ballard/Green Lake area doubled from a year ago. Even though buyers are finally getting more choices, demand still exceeds supply. Homes sell faster in Seattle than in any other U.S. real estate market. That demand propelled the median price of a single-family home to $812,500; up 8 percent over last June and down from the record $830,000 set in May.
The largest jump in home prices in the region came in Snohomish County. While higher-priced markets in King County are seeing increases slowing slightly, the median price of a single-family home here jumped 14 percent to $511,500, a new high for the county. Buyers willing to “keep driving until they can afford it” are finding Snohomish County an appealing destination.
This post originally appeared on the WindermereEastside.com Blog.