Housing prices: peak markets of Seattle-area to match peak markets of Bay Area, CA? (Bellevue: how much, houses)

[hiphapa]

I was wondering what you all think... I'm looking at the peak residential markets of the Bay Area (such as Palo Alto/Peninsula/North Bay area?) and the peak residential markets of Seattle (I'm thinking Bellevue/Mercer Island/Laurelhurst?) and wondering if the Seattle-area markets might hit the price per sqft they're seeing in the Bay Area. I was looking at some Palo Alto homes in so-so condition with so-so lot size and see they're selling for $1500+ per sqft. Is it imaginable that the Seattle-area could see such prices for homes without being waterfront or other special characteristics?

I'm really wondering how much room there is for these crazy prices to continue to go up, and the Bay Area seems like it's a couple years ahead of us.

[Hemlock140]

No, it's still a big difference. I grew up in Lafayette, CA where the older home (1939) I lived in is currently valued (per Zillow) at $2.5 million and the median family income is $138,073.

Here in Sammamish, WA our 30% larger and newer home built in 1979 is valued (per Zillow) at only $1.55 million, and the median family income is $183,000.

A relative in Walnut Creek has a home that's 1/2 the size of ours, and far older than ours, built in 1962
and value is $1.232 Million, median family income $105,000.

When you consider the home price vs. income, it will still demonstrate that the Bay Area is still much less affordable. Obviously there will be exceptions, with both areas having $10 million mansions, and old tear-downs or fixers, by the median tells the story.

[hiphapa]

But that's exactly my point. There's more room for prices to go up here because income is higher relative to home values, and it seems like Seattle/Bellevue have increasingly higher paying jobs than 5-10 years ago with more tech companies expanding and hiring here. I personally don't believe work from home will last forever and offices will begin to fill up again soon.

Sammamish and Lafayette are probably comparable, but which local city/neighborhood would you compare to Palo Alto?

And I just use Palo Alto because I regularly see homes selling in the $1500-2000 per sqft range, mostly driven by the tech boom, which is also happening here.

[homesinseattle]

Originally Posted by hiphapa

I was wondering what you all think... I'm looking at the peak residential markets of the Bay Area (such as Palo Alto/Peninsula/North Bay area?) and the peak residential markets of Seattle (I'm thinking Bellevue/Mercer Island/Laurelhurst?) and wondering if the Seattle-area markets might hit the price per sqft they're seeing in the Bay Area. I was looking at some Palo Alto homes in so-so condition with so-so lot size and see they're selling for $1500+ per sqft. Is it imaginable that the Seattle-area could see such prices for homes without being waterfront or other special characteristics?

I'm really wondering how much room there is for these crazy prices to continue to go up, and the Bay Area seems like it's a couple years ahead of us.

Hiphapa, You have articulated well one of the main reasons there is a constant flow of tech workers from The Bay Area to Seattle and the Eastside. Comments I hear from them go like this: “You get more house for your money here. I’m sick of fires and brown landscape. I love nature and hiking closeby. I can afford a view. Seattle seems more compact and friendly”. So yes, although home prices are high here, they continue to be considerably more expensive in SFO.

[flyingsaucermom]

Originally Posted by homesinseattle

Hiphapa, You have articulated well one of the main reasons there is a constant flow of tech workers from The Bay Area to Seattle and the Eastside. Comments I hear from them go like this: “You get more house for your money here. I’m sick of fires and brown landscape. I love nature and hiking closeby. I can afford a view. Seattle seems more compact and friendly”. So yes, although home prices are high here, they continue to be considerably more expensive in SFO.

So you are agreeing that prices will continue to go up because of well-funded techies escaping SFO?

I've met several investors that are no longer investing in WA because they say the "numbers don't work" and they are looking instead at places like Florida, Georgia, Indiana... two separate investing groups say this.

But as a novice looking at things with a similar perspective as the OP I see that there is still plenty of opportunity to "buy in".

Of course one has to also content with the increasing landlord-hostility Seattle in particular is creating.

[jabogitlu]

A few things are happening.

1. Tech companies are increasingly looking to Austin, TX and secondary markets like Nashville for future growth. Look at the announcement from Tesla a couple days ago. The lack of continuing industry expansion in the Bay will plateau the market there and without increased demand, housing prices there are probably flat and could see a repricing event for middle tier and land value/teardown houses. Class A houses will likely remain in demand.

2. Amazon once again really came to the rescue in Seattle. Yes, we are seeing not insignificant expansion from Facebook and Google, but the addition of a total of 25,000 employees in downtown Bellevue will be a huge shot in the arm for housing markets on the Eastside. I think we may be underestimating how much housing prices will increase in top tier markets like Sammamish and lakeside Bellevue. Additionally, there'll probably be some spillover effect in Seattle submarkets like Sand Point / Bryant.

3. A bit longer term than the above observations, the PNW is positioned to witness a significant number of climate change refugees from other states in the US like (ironically) Texas, Georgia, Florida, Arizona, and California. This is pretty much an accepted scientific reality at this point, that states with hotter climates will become increasingly uninhabitable due to temperature/water scarcity and/or increased severity of natural events like hurricanes. Wealthy folks will be purchasing homes here due to the favorable climate and relative lack of weather-related events.

So in my opinion, assuming continuing market conditions like a stable federal government/lending environment, the higher-end housing markets still have room to grow and will be a longer-term good bet, as well.

[hiphapa]

Originally Posted by jabogitlu

A few things are happening.

1. Tech companies are increasingly looking to Austin, TX and secondary markets like Nashville for future growth. Look at the announcement from Tesla a couple days ago. The lack of continuing industry expansion in the Bay will plateau the market there and without increased demand, housing prices there are probably flat and could see a repricing event for middle tier and land value/teardown houses. Class A houses will likely remain in demand.

2. Amazon once again really came to the rescue in Seattle. Yes, we are seeing not insignificant expansion from Facebook and Google, but the addition of a total of 25,000 employees in downtown Bellevue will be a huge shot in the arm for housing markets on the Eastside. I think we may be underestimating how much housing prices will increase in top tier markets like Sammamish and lakeside Bellevue. Additionally, there'll probably be some spillover effect in Seattle submarkets like Sand Point / Bryant.

3. A bit longer term than the above observations, the PNW is positioned to witness a significant number of climate change refugees from other states in the US like (ironically) Texas, Georgia, Florida, Arizona, and California. This is pretty much an accepted scientific reality at this point, that states with hotter climates will become increasingly uninhabitable due to temperature/water scarcity and/or increased severity of natural events like hurricanes. Wealthy folks will be purchasing homes here due to the favorable climate and relative lack of weather-related events.

So in my opinion, assuming continuing market conditions like a stable federal government/lending environment, the higher-end housing markets still have room to grow and will be a longer-term good bet, as well.

Thanks for the insights! I didn’t even think bout climate change, but that will probably play a role in the future.

[uniquetraveler]

Originally Posted by jabogitlu

A few things are happening.

1. Tech companies are increasingly looking to Austin, TX and secondary markets like Nashville for future growth. Look at the announcement from Tesla a couple days ago. The lack of continuing industry expansion in the Bay will plateau the market there and without increased demand, housing prices there are probably flat and could see a repricing event for middle tier and land value/teardown houses. Class A houses will likely remain in demand.

2. Amazon once again really came to the rescue in Seattle. Yes, we are seeing not insignificant expansion from Facebook and Google, but the addition of a total of 25,000 employees in downtown Bellevue will be a huge shot in the arm for housing markets on the Eastside. I think we may be underestimating how much housing prices will increase in top tier markets like Sammamish and lakeside Bellevue. Additionally, there'll probably be some spillover effect in Seattle submarkets like Sand Point / Bryant.

3. A bit longer term than the above observations, the PNW is positioned to witness a significant number of climate change refugees from other states in the US like (ironically) Texas, Georgia, Florida, Arizona, and California. This is pretty much an accepted scientific reality at this point, that states with hotter climates will become increasingly uninhabitable due to temperature/water scarcity and/or increased severity of natural events like hurricanes. Wealthy folks will be purchasing homes here due to the favorable climate and relative lack of weather-related events.

So in my opinion, assuming continuing market conditions like a stable federal government/lending environment, the higher-end housing markets still have room to grow and will be a longer-term good bet, as well.

Right on.. not to forget, growth of biotech and aviation industry (not aircraft manufacturing-- which may move to south, but high end flight deck development, SpaceX and Blue Origin expansion etc.)

https://www.geekwire.com/2019/alexan...ga-block-deal/

[Hemlock140]

Originally Posted by hiphapa

But that's exactly my point. There's more room for prices to go up here because income is higher relative to home values, and it seems like Seattle/Bellevue have increasingly higher paying jobs than 5-10 years ago with more tech companies expanding and hiring here. I personally don't believe work from home will last forever and offices will begin to fill up again soon.

Sammamish and Lafayette are probably comparable, but which local city/neighborhood would you compare to Palo Alto?

And I just use Palo Alto because I regularly see homes selling in the $1500-2000 per sqft range, mostly driven by the tech boom, which is also happening here.

I don't think there is any city comparable to Palo Alto, but the closest, albeit much smaller would be Mercer Island, with 25,675 people, median home $1,966,986. Palo Alto homes are at $3,488,610 and they have more than twice as many people, 66,573.

[homesinseattle]

Originally Posted by Hemlock140

I don't think there is any city comparable to Palo Alto, but the closest, albeit much smaller would be Mercer Island, with 25,675 people, median home $1,966,986. Palo Alto homes are at $3,488,610 and they have more than twice as many people, 66,573.

Medina average home values match or exceed Palo Alto’s but population is only 3,200 people.