It’s no secret that Seattle and Bellevue, Washington have a housing shortage right now. It has dominated the real estate news cycle over the past few years, and it’s something we’ve covered repeatedly here on our blog.
So maybe some good news is in order. Recent reports and permitting trends from the building industry point to a surge in condo development, in both the Seattle and Bellevue real estate markets. This could bring some much-needed inventory onto the market, giving buyers more options.
More Condos Coming to Seattle and Bellevue in 2019
A September 27th article from the Seattle Times explained that real estate developers in the area are “switching gears to construct for-sale condo projects” after years of focusing on rental apartments. As a result, we could see a significant increase in the number of condos coming onto the market in both Seattle and Bellevue, probably starting in 2019.
Condos are a popular option in both cities, and for a few reasons:
- In both Seattle and Bellevue, condominium units tend to be more affordable than detached single-family homes (on average).
- Condos allow residents to live in the heart of the city, as opposed to the surrounding suburbs.
- Condos are a low-maintenance alternative to traditional home ownership, and they often come with additional perks like fitness centers, pools, and other amenities.
In recent years, both of these housing markets (as well as the broader metro area) have suffered from severe shortages of supply. And while there has been an uptick in inventory over the last year or so, the supply situation is still well below what’s considered to be a “balanced” market.
But relief is on the way. According to the Times article mentioned earlier:
“In Seattle and Bellevue, only about 2,000 condos have opened so far this decade. But about 6,000 are in the pipeline for completion in the next few years, according to Polaris Pacific, a marketing and sales firm that tracks condos in the region.”
Most of those 6,000 units will be built in Seattle. A slew of new projects have been announced in that city over the past few months, totaling about 5,000 units.
Bringing Home-Price Growth Back Down to Earth
This new flood of inventory could also have a cooling effect on home prices across the metro area, and especially within Seattle and Bellevue.
For the last few years, this region has experienced a supply-and-demand imbalance that has led to skyrocketing home values. This in turn has created affordability issues for a large portion of the population.
Population growth is a contributing factor in all of this. From 2011 to 2016, the Seattle metro area’s population grew by 8.5%. That was more than double the national growth rate of 3.7% during that same period of time.
It stands to reason that a significant increase in housing supply across Seattle and Bellevue would tip the scales, bringing annual home-price appreciation down closer to historical norms. And that would be a positive development, from an economic standpoint.