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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: 261167

Reported Deaths: 5713
CountyCasesDeaths
DeSoto17561191
Hinds16687329
Harrison14050202
Rankin11102217
Jackson10729188
Lee9014143
Madison8495168
Jones6607114
Forrest6135122
Lauderdale6067192
Lowndes5490120
Lafayette511794
Lamar499865
Washington4904125
Bolivar4087109
Oktibbeha403581
Panola380981
Pontotoc374757
Monroe3651106
Warren3649103
Union353263
Marshall352069
Neshoba3464154
Pearl River3422105
Leflore3090109
Lincoln304287
Sunflower290373
Hancock288461
Tate279062
Alcorn270754
Pike268180
Itawamba266662
Scott256048
Yazoo253756
Prentiss251153
Copiah247649
Tippah247550
Coahoma245954
Simpson241471
Leake236167
Grenada222471
Marion220273
Covington219072
Adams212370
Wayne208432
Winston205870
George203539
Newton197346
Attala196461
Tishomingo193861
Chickasaw188444
Jasper177838
Holmes171368
Clay164237
Tallahatchie155635
Stone149525
Clarke144762
Calhoun139922
Smith127725
Yalobusha121134
Walthall114037
Greene112929
Noxubee112225
Montgomery111236
Carroll106422
Lawrence105617
Perry104031
Amite100826
Webster95424
Tunica88221
Claiborne87825
Jefferson Davis87727
Benton84823
Humphreys84224
Kemper80020
Quitman7049
Franklin69617
Choctaw62513
Wilkinson59625
Jefferson56520
Sharkey44817
Issaquena1606
Unassigned00

Alabama Coronavirus Cases

Cases: 436087

Reported Deaths: 6486
CountyCasesDeaths
Jefferson63969994
Mobile31211565
Madison27851208
Tuscaloosa21233271
Montgomery19698326
Shelby19093130
Baldwin16981188
Lee13036105
Morgan12526134
Etowah11987179
Calhoun11441206
Marshall10357123
Houston8886158
Limestone827876
Cullman8203108
Elmore8120104
DeKalb7828103
Lauderdale7798103
St. Clair7763125
Talladega6394111
Walker6002177
Jackson594644
Colbert545276
Blount543986
Autauga532761
Coffee456762
Dale406883
Franklin372448
Russell349212
Chilton342873
Covington336068
Escambia330144
Dallas312096
Tallapoosa3120107
Chambers301170
Clarke293336
Pike261131
Marion251558
Lawrence250752
Winston232742
Bibb221248
Geneva208746
Marengo206529
Pickens199031
Hale182742
Barbour179337
Fayette177029
Butler172459
Cherokee164330
Henry158224
Monroe151320
Randolph144336
Washington140127
Clay129146
Crenshaw122944
Macon120937
Cleburne120724
Lamar119721
Lowndes113736
Wilcox106622
Bullock102228
Perry99118
Conecuh96821
Sumter90026
Greene76823
Coosa63215
Choctaw51724
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