Coldwell Banker Bain | Seal, a leading Pacific Northwest real estate market brokerage, has released 2017 market predictions for the Puget Sound, Portland and SW Washington regions and specific markets.
When assessing the broader regional market, CB Bain | Seal President and COO Mike Grady annually reviews the most recent local data on employment, Washington state driver’s licenses, and new building permits.
“The data shows that the population growth rate in the Puget Sound region, currently at double the national rate, coupled with expected continued strong job growth, is one factor pointing to our main prediction that the real estate market will continue to be as strong as it was in 2016,” said Grady. “According to the Seattle Times, nearly 200,000 people surrendered their out-of-state driver’s licenses for Washington state licenses during the past 12 months, a sure sign of a commitment to residency. Even if we conservatively apply two licenses per household, that’s still 100,000 new households moving into the area. An average of 70% of those move to King, Snohomish, Pierce and Kitsap counties because that’s where the majority of jobs are, according to the Puget Sound Regional Council,” he continued.
And finally, Grady points to the fact that 9,120 building permits were issued over the past 12 months, compared to the 70,000 or so new households established in the area, to build his case for a banner 2017 year ahead in real estate. He stands by this prediction even considering the recent mortgage rate increase and any major decision made by the incoming Trump administration that might have a negative influence on the economy.
“There’s just nothing that can be done, in our area anyway, to deflect the number of households needed for new residents to the area,” he said. “We will most definitely continue to see a seller’s market.”
In local neighborhoods, CB Bain | Seal Principal Managing Brokers agree and report their predictions as follows:
Seattle: John Deely, Principal Managing Broker, CB Bain – Lake Union
“2017 will be almost as fast paced as 2016 in the Seattle market. Buyer demand will continue at high levels as local companies continue to hire for newly created positions. Overall volumes for the number of sales in the Seattle market will increase early and level off toward mid-year in 2017 due to a predicted increase in interest rates for a slight increase in net sales. The seemingly inexhaustible supply of ready, willing and able buyers will start to level off but the imbalance of supply to demand will continue as buyers search out and purchase the available inventory. The median prices in Seattle continue to hover around the $600,000 threshold with an annual appreciation rate that exceeded 10% in 2016, dropping back into single digits in 2017 as more sellers put their properties on the market. The increase in equity and the tick up in interest rates will entice more sellers to the market.
The high number of well-paying jobs in our area is fueling the demand as more high-tech firms expand into and grow operations in the Seattle core. A recent announcement that Facebook is expanding their operations here along with the new Google campus and Amazon’s non-stop growth will continue to put demand on inventory and upward pressure on the region’s prices.”
Bellevue: Thadine Bak, Principal Managing Broker, CB Bain - Bellevue
“Buyers will be in the mix right out of the gate, looking for increased inventory in January, trying to be ahead of the hyper-competitive spring market. Though higher mortgage rates may soften buying power for some buyers, we don’t expect this to restrict price growth as Eastside inventories will continue to be extremely tight, with limited new construction. Condos will continue to sell briskly, and the luxury market will continue to lean heavily on cash buyers. While sellers will remain in relative control of the market, they will – as always – need to position their homes properly, with the right preparation, pricing and marketing.”
Mercer Island: EJ Bowlds, Principal Managing Broker, CB Bain – Mercer Island
“The story on Mercer Island in 2017 will most likely still be the lack of inventory and homes for sale under $1 million. The high water mark for listings in 2016 was 90 single-family homes in July and the 10-year average number of listings in July was 130. Closed units through November were down another 13% from last year. Last week we had a rare residential listing priced in the mid $800,000s and it sold for over $1 million, which speaks to a continued frenzy here.”
Redmond: Rick Costello, Principal Managing Broker, CB Bain – Redmond
“Based on the current market conditions (extremely low inventory and high number of ready buyers), and with the number of people moving to the area, 2017 will mirror 2016 and competition will push prices up even higher.
Microsoft, Amazon, and Google business projections are for double digit increases over the next 36 months.
Long-standing communities in Redmond’s “Education Hill” neighborhoods of homes built between the 1960s through the 1990s have the greatest potential for market activity. These areas provide over 2000 homes that will be more affordable (ranging from the high $400s to $800s) than the new construction that has an average sold price point of $1,141,080. The 18 new construction homes that are available in Greater Redmond have an average price of $1,372,653. That is 20.3% greater than what has sold over the past 11 months.”
South Snohomish County: Diedre Haines, Principal Managing Broker, CB Bain – Lynnwood and Edmonds
“I expect the 2017 market in Snohomish County to be very similar to this year. We may see a modicum of listing increases as more new construction comes on market. The recent rise in interest rates has and will continue to spur market activity. Not only will current buyers most likely increase in numbers, but we also expect sellers that have been holding off on listing their homes to decide to go on market. Some are fearful that rates might escalate to a point of having a negative impact on sales, and if they don’t sell now, they are risking missing the boat.
Our County’s economy remains strong with low unemployment. Hot areas in South Snohomish are most likely going to be Mountlake Terrace and Shoreline due to new developments of both residential and condominiums, affordability, and close access to I-5. Market demand will support an increase in condo/townhome sales. The majority of homes in South Snohomish are now above water or have at least appreciated to the market prices of 2007.”
Everett: John Speer, Principal Managing Broker, CB Bain – Everett
“We expect the residential real estate market throughout central and north Snohomish County to continue to be a strong sellers’ market in 2017, but very challenging for most home buyers due to the persistent low listing inventory issues. Current homeowners who are thinking about moving up or down market would be more inclined to list their properties for sale, and help improve the resale property supply levels, if only they had confidence that they could achieve their own next home purchase goals. King County’s higher home prices and inventory shortages will continue to send more home buyers looking north in Snohomish County where the commuting distance is still reasonable and both resale and new construction homes are comparatively more available and affordable. Snohomish County will continue to be one of the fastest growing regions in the Pacific Northwest, helping to improve the commercial real estate market in Everett and its surrounding communities in 2016 by lowering leased space vacancy rates and attracting more investors and employers. We expect this trend to continue in 2017. However, the government, schools and transportation resources in this area will be under significant strain for several years until the urban growth plans, budgets and infrastructure improvements are realigned with the projected dramatic increase in the population.”
Anacortes: Lana Thompson, Principal Managing Broker, CB Bain – Anacortes
“I believe the Anacortes and surrounding area market will continue to grow as people leave Seattle and the Eastside looking for well- priced housing. I anticipate our market to be very busy as Skagit County and Anacortes are experiencing low inventory and homes sell quickly. Besides retirees finding our area attractive there is an influx of military families to NAS Whidbey and many choose to live away from Oak Harbor and opt to live in cities like Anacortes in the Skagit Valley.
There are a limited number of lots available in Anacortes for new developments and individuals. Two housing developments that are in the works - one for approx. 30 new homes and another for 13-14 new homes account for many of the available lots. Older homes with large lots are also attracting buyers as they can maximize the space by tearing down the existing homes and build duplexes and in some cases triplexes. Resale home sales are brisk.”
Bainbridge Island: Stacia Smith, Principal Managing Broker, CB Bain - Bainbridge Island
“We expect the market in 2017 to be better than 2016 on Bainbridge and Kitsap County. The inventory is limited as it is everywhere but we’re expecting that to improve this year, especially now that the election is over. We are seeing a lot of California transferees and people transferring in from around the country with Amazon. Bainbridge has become quite the Amazon community and carries extreme appeal for California transplants. With interest rate hikes, we expect to see more buyers jumping in after the holidays and then perhaps tapering off once we hit late summer, which is typical. It will pick back up again come late September/early October.”
Tacoma: Mike Flynn, Broker, CB Bain –Tacoma
“Last month there were 28% more residential sales than listings in Pierce County, so 2017 will get an early start and promises to be a strong year. With 17% local population growth, and a growing number of King County workers heading south to find homes, we can expect a very active market in Pierce County for 2017. “
Gig Harbor: David Bastian, Principal Managing Broker, CB Bain – Gig Harbor
“I expect the Gig Harbor and Kitsap markets to continue to be strong sellers' markets in 2017. Over the last two years, we have had a shortage of inventory; many homes sold within a very short period of time; many sellers were getting multiple offers; and sales prices ranged from 98% to 102% of the list price. New construction has exploded, so new homes are being introduced to the market, but it does not appear that the new inventory is keeping up with demand. Additionally, in Kitsap County, three events will significantly affect the real estate market: 1) Franciscan Health System in Tacoma has completed its acquisition of Harrison Medical Center which will bring jobs and increase sales; 2) Another aircraft carrier (USS Nimitz) has been added to the Bremerton Naval Shipyard which brings with it a small city of individuals needing housing and, 3) Kitsap Transit Authority received voter approval for a “Fast Ferry” from Bremerton, Kingston and Southworth to Seattle, cutting travel time in half. Kitsap will be a legitimate home community consideration for those who work in Seattle.”
And in the Portland, OR and SW Washington region, principal managing brokers provided insight into what they’re seeing in their markets as well as predictions for the new year, with similar expectations as those in Puget Sound region for continued activity.
Portland: Mark Bixel, Principal Managing Broker, CB Seal – Portland Uptown
“Portland’s housing market will continue to be strong in 2017. Demand coupled with a lack of inventory will keep home prices up. There will be a slowing in first time home purchases due to the appreciation in the market and possible interest rate increases. This should have only a minor effect for the Portland Uptown branch considering our market area.”
Lake Oswego: David Sly, Principal Managing Broker, CB Seal – Lake Oswego
“I believe we will have another year of strong sales, even with the uptick in projected interest rates and a perception of uncertainty with the election and national and world issues. Oregon is still one of the most desirable areas in the nation and we will continue to see people wanting to move her to start a new career, raise families and even retire.“
Oregon City: Penny Yaw, Principal Managing Broker, CB Seal – Oregon City
“I believe our market will remain steady through 2017. Although we have a lot of new construction going in, this should balance out the shortage of existing home sales. The demand has kept the prices on the up rise but I see that leveling off a bit now. We have several areas being developed in Oregon City including Marlo Farms off of Leland Rd., Highland Park off of Central Point Rd. and Pavilion Park off of Pease Rd. Our market also extends to the Clackamas/Happy Valley area which also has several areas of new construction: Rock Creek Meadows off of 172nd and 152nd.“
Vancouver West: Pam Saunders, Principal Managing Broker, CB Seal – Vancouver West
“We’ll see Clark County West side continue to have good growth in 2017. The North (Ridgefield, La Center, Woodland) area will experience significant growth due to the casino opening in 2017 and employing 1300+ people, WSU college campus growing to full campus, and Clark College planning to add a full nursing school in the Ridgefield Center area. We are still at two months inventory for Clark County and still have quite a few buyers. 2017 looks to be a lot like 2016.”
Vancouver East: David Knode, Principal Managing Broker, CB Seal – Vancouver East
“The residential sales forecast for Clark County will still be strong in 2017. New listings, and closed deals have softened just slightly in the past two months which is normal for this time of year, but overall both categories have increased over 2015 by 3.7% and 3.6% respectively. New home construction permits are up by over 15 % compared to 2015 and are forecasted to increase again in 2017.
In Downtown Vancouver, the $1.5 billion dollar Waterfront Project has created quite a stir. With more than 3000 residential units planned and more than 1.25 million square feet of commercial space people and businesses are clamoring to reserve their spots. This is a long-term project with the first buildings opening in 2017. Upon its completion, this new urban neighborhood will bring more than 10,000 jobs, as well as over $385 million (the present value of state and local taxes over the next twenty years) to the region’s economy.”
Longview/Cowlitz County: Kevin Stonelake, Principal Managing Broker, CB Bain – Longview
“I believe Longview (Cowlitz County) will look much like 2016 steady growth and appreciation anywhere from 4% to 8% in both categories. Clark County is still short on inventory and median sales price in Vancouver is about $100,000 higher there than it is in Longview, which is causing and will continue to cause buyers from Clark County to move north. Also we have a number of new jobs coming in to the area and we’re hearing that builders are looking for land and or have purchased land to start new construction projects for 2018. The future is bright in Longview.”