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It's really tough to be a homebuyer in Seattle

If you're hoping to buy a home in Seattle, be prepared for rejection.A lot of it.Homes frequently sell ...

Posted: May 16, 2018 5:44 PM
Updated: May 16, 2018 5:44 PM

If you're hoping to buy a home in Seattle, be prepared for rejection.

A lot of it.

Homes frequently sell for well over asking and receive multiple offers.

"For buyers, we are typically making six to 10 offers before we get a house," said Rob McGarty, who has been a real estate agent in Seattle for 14 years. "The amount of emotional energy going into preparing these offers is huge."

Home prices in Seattle are on fire: rising nearly 13% in February from the same time a year ago, according to the latest S&P CoreLogic Case-Shiller Indices.

Prices have risen so fast that it's led to an affordability crisis, with no relief in site.

"Seattle seems to be defying all the laws of housing market trends," said Daren Blomquist, senior vice president at real estate data firm ATTOM.

Related: Home prices are on an epic run

The problem is simple: there are more people looking to buy homes than there are homes available for sale.

Seattle's population has been rapidly growing recently thanks in part to its large homegrown businesses like Amazon and Starbucks.

Amazon in particular has played a major role in Seattle's economic growth and strength. The company employs more than 40,000 workers at its Seattle headquarters and pays out nearly $26 billion in compensation.

"Amazon has amassed a huge talent pool of employees that has caused other companies to open offices here," said McGarty. "We have a ton of [San Francisco] Bay area companies that now have offices in Seattle ... those transplants have driven prices up."

Home values in King County, which is where Amazon is located, have appreciated twice as fast as the national average, according to Blomquist. Average annual home price appreciation from 1995 (when Amazon first launched) to 2018 was 6%, according to ATTOM. Over the same time period, the national average was just 3%.

Life as a buyer

After months of online searching, open houses and having several offers rejected, Kayela Robertson and her husband, Cody, had hit their limit.

She said it was common to see the homes they lost out on go on to sell for at least $100,000 over the asking price with multiple offers. They were about to expand their search radius when they made their seventh offer.

"If we were going to be in Seattle, we had joked that we needed to get this house. This was the make it or break it offer," she said. "If we didn't, I would have to cave and move farther out."

Fortunately, their seventh offer was accepted. To close the deal, they offered $140,000 more than the list price of $590,000. They also dropped all contingencies, included an escalation clause, put $100,000 in escrow and promised to close within two weeks.

Related: Looking to buy your first home? Good luck with that

The couple sold their home in Spokane in January for full asking price, and the money from the sale helped make their offer competitive. They closed on the new home a month ago.

"The house we sold was much nicer and bigger and was much less [than the Seattle home]," Robertson said. "It is still an adjustment that we are paying more than two times more for this house."

Where Seattle goes from here

Despite being a seller's market, Seattle homeowners are hesitant to sell.

Last year, the city was among the best markets to sell a home, and the average home seller return on investment was 64%, according to ATTOM. But even if they get a good price, sellers are struggling to find a home to trade up to.

While the demand is clearly there, there's only so much room to build in Seattle. It's bounded by water and mountains.

The city also has strict regulations when it comes to building apartment and condos, and 70% of the land mass in the city is zoned for single family homes, according to Matthew Gardner, chief economist at Windermere Real Estate.

"We aren't very dense at all," he said.

The home affordability problem could make the city less appealing to businesses. The city recently passed a new tax on big businesses that will help pay for affordable housing and fight homelessness.

At some point, the housing affordability issues and high cost of living, plus the new business tax, could cause companies to think twice about starting or expanding in Seattle.

"The two most important things when companies think about growing in a market is whether there is a suitable talent pool and how much they have to pay people, and the biggest part of salary is the local cost of living," said Gardner.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 482902

Reported Deaths: 9425
CountyCasesDeaths
Harrison33063488
Hinds31021589
DeSoto30610358
Jackson23687348
Rankin21340370
Lee14909220
Madison14166271
Jones13404227
Forrest13160240
Lauderdale11601305
Lowndes10443176
Lamar10214130
Pearl River9098221
Lafayette8241137
Hancock7514112
Washington7102150
Oktibbeha6964124
Monroe6514164
Neshoba6475201
Warren6464164
Pontotoc630393
Panola6250126
Marshall6126123
Bolivar6115144
Union574186
Pike5613136
Alcorn537290
Lincoln5303131
George471472
Scott459196
Leflore4476140
Prentiss446779
Tippah446480
Itawamba4444100
Adams4416116
Tate4394101
Simpson4335112
Wayne433066
Copiah431787
Yazoo423386
Covington415792
Sunflower4148104
Marion4099104
Leake397586
Coahoma3957100
Newton370875
Grenada3556104
Stone350860
Tishomingo336289
Attala325387
Jasper314162
Winston304691
Clay296473
Chickasaw287065
Clarke282190
Calhoun266141
Holmes262187
Smith250649
Yalobusha221047
Tallahatchie220450
Walthall211058
Greene209045
Lawrence206833
Perry199953
Amite198452
Webster196542
Noxubee178939
Montgomery172454
Jefferson Davis168342
Carroll162137
Tunica153334
Benton142535
Kemper138640
Choctaw127026
Claiborne126834
Humphreys126637
Franklin116728
Quitman103926
Wilkinson101936
Jefferson91333
Sharkey63020
Issaquena1926
Unassigned00

Alabama Coronavirus Cases

Cases: 789054

Reported Deaths: 14022
CountyCasesDeaths
Jefferson1115991765
Mobile708511234
Madison49865633
Shelby36274315
Baldwin36242495
Tuscaloosa33931548
Montgomery33190678
Lee22680220
Calhoun21211410
Morgan19816335
Etowah19300462
Marshall17680274
Houston16823386
St. Clair15442305
Cullman14602258
Limestone14581188
Elmore14480264
Lauderdale13520281
Talladega12958236
DeKalb12199237
Walker10588330
Blount9720157
Autauga9667137
Jackson9385158
Coffee8882175
Dale8609173
Colbert8534184
Tallapoosa6673181
Escambia6591121
Covington6452167
Chilton6385144
Russell607255
Franklin5795101
Chambers5416134
Marion4800120
Dallas4705189
Clarke463279
Pike462397
Geneva4413117
Winston425895
Lawrence4117108
Bibb409381
Barbour347270
Marengo326285
Monroe320053
Butler318290
Randolph305956
Pickens305274
Henry301858
Hale292685
Cherokee289855
Fayette279673
Washington245448
Crenshaw238470
Cleburne235851
Clay228565
Macon220158
Lamar197743
Conecuh182046
Lowndes170758
Coosa170235
Wilcox159736
Bullock149243
Perry136537
Sumter124536
Greene121443
Choctaw73427
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