Seattle is a seaport city on the West Coast of the United States. With an estimated population of 755,745 people, it is the largest city in both the state of Washington and the Northwestern U.S. The Seattle metropolitan area has a population of over 3.9 million residents, making it the 15th largest metro area in the nation.
The Seattle real estate market benefits from the fact that Seattle is one of America’s fastest growing cities (ranked #2 by Forbes in 2018), with a population growth rate twice the national rate. This is particularly due to the strong annual net migration that the city experiences. Also, according to NeighborhoodScout, more than 53% of the population are renters rather than homeowners, making the Seattle real estate market a top location for rental property investments.
The “Emerald City”, as it is famously known, enjoys a thriving and diverse economy. It is home to eight Fortune 500 companies, including some of the biggest tech companies in the world. Software giant Microsoft, internet retailer Amazon, and warehouse store Costco all have their headquarters in and around the city. The aerospace industry remains a major contributor to Seattle’s economy after the local Boeing company established the city as a center for aircraft manufacturing nearly a century ago; Boeing is the largest private employer in the Seattle area with about 80,000 employees. International trade is another leading industry in Seattle due to its strategic location: The port of Seattle is a major gateway for trade with markets in Asia and serves as a departure point for cruises to Alaska. Seattle is also a hub for startups, particularly in eco-friendly building and clean technologies. Other industries based in the city include transportation equipment manufacturing, finance, biotechnology, healthcare, insurance, tourism, agriculture, construction, and retail.
Due to the healthy employment market, Seattle is witnessing a big influx of young techies moving into the city, increasing the demand for the city’s real estate, especially when it comes to traditional rental properties. The multiple economic sectors, together with the strong economic growth, make the city a magnet for real estate investors.
Seattle was the #1 hottest real estate market in 2018 but slipped to #16 in this year’s Emerging Trends in Real Estate: United States and Canada 2019 report by PWC. Nonetheless, it is still viewed as an attractive place in which to invest; According to the report, real estate investor demand in Seattle is still the highest in the U.S. Pacific region.
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Seattle real estate prices are among the most expensive in the U.S. It is therefore natural to see that property appreciation has been significant over the years. Since the beginning of 2000, Seattle properties have experienced a total appreciation of 169.55% according to NeighborhoodScout, which is an average annual home appreciation rate of 5.29%.
However, Zillow reports that Seattle property values have declined by 4.5% over the past year and are predicted to fall 3.8% within the next year. It is believed that the Seattle real estate market is cooling down due to a decrease in hiring at Amazon’s Seattle headquarters in recent months. In fact, Seattle housing prices rose to record levels in recent years, fueled largely by the success of Amazon. Since that peak, however, they have started to cool down. Now, real estate properties are selling at the market price, which is a good sign for future Seattle real estate investors.
The Seattle housing market is currently a buyer’s market as there are more homes for sale on the market than people looking to buy. It is possible that the Seattle housing market cool down is just a sign that buyers reached their limit after years of incessant sales. As a real estate investor, you should take advantage of this state and buy an investment property in Seattle.
The last few decades have seen the “Emerald City” blooming and turning into a top destination for people from all around the world. With it being such a tourist-friendly location, Seattle short-term rental properties are a great real estate investment. The monthly Airbnb rental income reported in 2018 for the city of Seattle was $3,225 on average.
The City of Seattle has enacted a number of regulations governing short-term rental businesses in the last couple of years. All Airbnb Seattle investors planning on hosting short-term stays (less than 30 nights at a time) must obtain a Short-Term Rental Operator’s Licence through the Department of Finance and Administrative Services (FAS), in addition to a Business Licence Tax Certificate. This licence costs $75 per unit and must be renewed each year. Airbnb Seattle investors are allowed to operate up to two dwelling units they own, one of which must be their primary residence. If the Airbnb listing is a secondary home (non-owner occupied), hosts are required to register the rental property with the city’s Rental Registration and Inspection Ordinance Program, for a fee of $70.
There is however an exception to this particular Airbnb regulation: Hosts already operating a short-term rental in the Downtown Urban Center will not be subject to any limits on the number of units they can rent out.