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Seattle Is The Hottest Housing Market of 2017 In U.S.

The hottest housing market of 2017

Yahoo Finance
by Amanda Fung

Not only is Washington’s largest city home to internet juggernaut Amazon, it also holds the title for the city with the fastest-growing home prices. Since September 2016, Seattle has been leading the S&P CoreLogic Case Shiller Home Price 20-City Composite Index and has maintained that spot each month. There’s no doubt that Amazon has been fueling the city’s real estate market but population and job growth coupled with high demand and low inventory are also lifting prices.

“Seattle is consistently outpacing the rest of the country,” said Lawrence Yun, chief economist at the National Association of Realtors. “High-tech workers are concentrated or were concentrated in the San Francisco, Silicon Valley area where prices got way too high. Seattle provides an alternative for people.”

Median sales price in Seattle was $478,500 in the third quarter of this year, up 13.4% from the same time last year, according to the NAR. That’s not exactly cheap since the median sales price in the U.S. was $254,000, but it’s still half of the price of a home in San Francisco, where the median sales price was $900,000.

Seattle has been at a 5.9% annual price increase or greater since November 2011, “that’s when mostly everything had bottomed out,” and at a 10.5% increase or more for a year and past three quarters, said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.

 “Home prices are driven by population and employment,” said Blitzer.

For the first time since 2013, Seattle had the fastest one-year population growth rate, 3.1%, among the 50 most populous cities in the U.S. in 2016, according to an analysis of U.S. Census Bureau data by The Seattle Times. Since the start of the decade, Seattle added an average 15,658 people a year, and in 2016 it topped 700,000.

Meanwhile the unemployment rate has been below the national rate, hovering around 3% for a few years now. Job growth has been strong mainly due to tech companies like Amazon. It helps that  Starbucks is also headquartered in Seattle and Microsoft’s home is in nearby Redmond, Wash. Microsoft recently revealed multibillion-dollar plans to redevelop its 500-acre campus. Last year, Amazon had the most job postings in Seattle with 19,766 openings to fill, according to job market data provider Burning Glass Technologies. The University of Washington and Starbucks were far behind with 5,156 and 1,992 job postings, respectively.

“We see evidence that these large companies with a lot of employees contribute to a strong housing market,” said Sarah Mikhitarian, an economist at Zillow, an online real estate database company headquartered in Seattle. “The strong labor market drives people to want to live there. At the same time, strong jobs put more pressure on price of homes.”

According to Amazon’s website, 15% of its employees live in Seattle and 20% of its workers walk to work. Microsoft didn’t break out how many workers it has in Seattle, but its website said the company has 47,121 in the Puget Sound Washington.

Amazon’s fortune “flows down to employees who have extra financial resources to purchase property,” said Yun.

Tech workers are flocking to Seattle

Seattlehas become a top destination for professionals in the tech industry, not just folks who want to work for Amazon. Seattle tech firms added 23,575 jobs in 2015 and 2016, accounting for 93% of all office jobs in the city created during that time period, according to a report by real estate firm CBRE. The total number of tech jobs created topped any other major office market in the U.S.

It helps that tech workers who live in Seattle appear to have more disposable income than those situated in other metropolises. A report by LinkedIn and Zillow found that Seattle tech workers who own their homes can expect to have about $2,000 more in disposable income each month than tech workers in the Bay Area. Seattle tech workers keep an average of 59% of their income after paying taxes and housing, while San Francisco Bay Area tech workers pocket only 37%. Those figures made Seattle the No. 1 “sweet spot” for tech workers looking for a job and housing.

High demand, low inventory

But it’s not easy to find a home to buy in Seattle. There’s a scarcity of homes for sale in Seattle. Eighty percent to 90% of new home listings sell within the first 30 days of the posting, normally only 30% of listings sell, said Lennox Scott,  chairman and CEO of brokerage John L. Scott Real Estate.

“Buyers are waiting for each new listing to come on the market,” said Scott. “We are down to about 15 days of inventory in the mid-price range [$500,000-$600,000] of homes.”

Similarly, even first-time homebuyers will have a hard time finding a place to buy. There are 35% fewer homes online than a year ago in the entry-level range, homes with a median sale price of $293,000, according to Zillow. And Seattle isn’t exactly the go-to city to find a deal on your first home. An entry-level home in the U.S. is almost half the price of Seattle home at $118,200.

“That shows you how hot the Seattle market is,” said Mikhitarian.

Further exacerbating the supply of for-sale homes in the market is the lack of new condo developments. A majority of new construction in Seattle is for apartments for rent. That’s where investor money has been focused on, said Scott, who added that there isn’t much activity in condo projects.

As a result homeowners are hesitant to put their place on the market in fear of not being able to find a new home to buy before someone snaps up their current home, said Scott. “There’s seller gridlock,” he said. Most think home prices will remain elevated since the city is still considered affordable compared with the nation’s other tech hubs and inventory will remain low. However, a slow down of tech hiring may change things. According to the Seattle Times, the city’s largest employer Amazon may be pulling back a little in their hometown. During the week of Dec. 3, Amazon had 3,503 job postings–the lowest in three years and down from more than 9,000 just six months earlier.

Sign of a slight cooling down

Most think home prices will remain elevated since the city is still considered affordable compared with the nation’s other tech hubs and inventory will remain low. However, a slow down of tech hiring may change things. According to the Seattle Times, the city’s largest employer Amazon may be pulling back a little in their hometown. During the week of Dec. 3, Amazon had 3,503 job postings–the lowest in three years and down from more than 9,000 just six months earlier.

But, so far, all signs indicate that the city’s housing market will remain sustainable. There might be a slight slowdown, given that employment growth is projected to slow through 2020. NAR’s Yun said we may see single-digit rate of appreciation instead of double digits in 2018.

 “The Seattle market is a magnet because of its natural beauty,” said Scott, touting the city’s mild temperatures and lush environment. “That’s why individuals like to move here when they do have a job opportunity. It is an attractive city.”

It’s called the Emerald City for a reason.

Housing Recovery

The Housing Recovery Is Leaving Out Most of America

Bloomberg

Patrick Clark

 

For further evidence of the uneven recovery among U.S. housing markets, how’s this: In the 10 most expensive U.S. metropolitan areas, median home values have increased by 63 percent since 2000, after adjusting for inflation. In the 10 cheapest metros, median values rose by just 3.6 percent.

That finding, and the others illustrated by the charts below, comes from the State of the Nation’s Housing, an annual report published Friday by Harvard University’s Joint Center For Housing Studies. While home prices have increased sharply in expensive coastal cities, plenty of urban centers are lagging behind. Home prices in 3 out of 5 metropolitan areas remain below their pre-recession peak, and home prices in low-income neighborhoods are faring even worse.

Meanwhile, the number of Americans spending 50 percent of their income on rent is near historic highs, something likely to get even worse if proposed budget cuts to the U.S. Department of Housing and Urban Development eliminate rental assistance for hundreds of thousands. Demand for rental units continues to rise, pushing rents higher.

The good news—such as it is—is that slow price appreciation in much of the country outside the hot metros means for-sale units there remain relatively affordable for more families.

Home prices increased in 97 out of the 100 largest metropolitan areas, according to the report. Nationally, nominal prices returned to the peaks they held before the Great Recession. But when you adjust for inflation, those prices are as much as 16 percent below past peaks. And appreciation hasn’t been evenly distributed: A May report from Trulia showed that nationally, just 1 in 3 homes has recovered peak value. The Harvard report, however, shows the price gains have been concentrated in high-income neighborhoods.

The flip side of low appreciation should be greater affordability for home buyers. Indeed, 59 percent of households in U.S. metros can afford to purchase the median home, the Harvard report stated, and in 1 in 5 metros, 75 percent can afford to buy. (In this case, the report defines affordability based on a 5 percent down-payment and monthly mortgage payments of no more than 36 percent of household income.)

But many local markets suffer from low inventory, the report notes, partly because of the sluggish pace of new construction: The U.S. added fewer housing units over the decade ending in 2016 than in any 10-year period since 1990.

And while a significant number of Americans spend half of their income on rent, that figure did tick down a bit in 2015, to 11.1 million. That’s still 49 percent more severely rent-burdened households compared with 2001. The vast majority of those households earn less than $30,000 a year.

Regardless of income, or whether they own or rent their homes, families that spend half their income on housing are forced to make sacrifices elsewhere in their budgets. When the poorest families pay less for housing, the extra money goes to necessities like health care. Among households that fall in the bottom 25 percent for total consumer spending, those that spent less than 30 percent of their income on housing spent three times as much on health care.

Those hoping for relief in the form of new rental stock may be waiting for a while. After growing by leaps following the foreclosure crisis, the nation’s stock of single-family rentals actually fell in 2015, the last year for which the report offers data. Low-rent units, meanwhile, are being replaced by more expensive offerings, the report said. That is where the money is.

New Rules for Clear Outs

Councilmembers Rob Johnson, Lisa Herbold, Mike O’Brien and Kshama Sawant unveiled legislation today that would revamp the City’s current practice of encampment sweeps, allowing for clear outs after the City fulfils certain conditions. The legislation was developed with the goal of protecting public safety and connecting the unhoused with permanent housing options. Councilmembers intend for this legislation to go through the legislative process in parallel to, and informed by, the work of the Mayor’s Unsanctioned Encampments Cleanup Protocols Task Force to ensure implementation before the winter months.

The legislation unveiled today has been amended to address concerns that have been aired in recent days, clarifying the City’s role in managing and clearing encampments. The new legislation would allow for encampment clear outs, with the following conditions:
• Outdoor living spaces in locations deemed unsuitable or unsafe are to be cleared with 48 hours notice, and the City must offer an alternative location for people to relocate;
• Camping on sidewalks, rights of way, school grounds, private property, highway overpasses, among other unsuitable locations, would not be allowed;
• For outdoor living areas that are not deemed unsafe, unsuitable, or hazardous, residents will be cleared out only after being offered an adequate and accessible housing option with at least 30 days advance written notice;
• Outdoor living spaces that have garbage accumulation and/or presence of unsanitary elements would be qualified as hazardous. Before clearing out the space, the City must first attempt to remedy the hazardous situation (for example, garbage containers, sharps containers, portable restrooms);
• Removed personal property must be catalogued and kept for a minimum of 90 days at storage locations accessible by public transit which operate beyond normal business hours;
• A 10 member advisory committee be created to provide recommendations on the City’s ongoing removal and impoundment actions;
• Further amendments will be considered through the Council’s legislative process.

Current City protocol provides homeless residents 72 hours notice before each sweep occurs and access to outreach workers to connect to shelter and services. In practice, the notice has sometimes been as little as 24 hours, and an outreach worker often does not have available shelters or services to offer to individuals that meet their needs. Personal belongings are either disposed of or sent to a facility in an industrial area for pickup.

A Seattle Times story recently illustrated problems with the City’s current outdoor living space cleanup protocol, including improperly destroyed personal belongings, inconsistency in cleanup notice and scheduling, unsuitable access to confiscated belongings, and exacerbating trauma onto marginalized populations.

According to the Human Services Department, the City has conducted 441 cleanups, or “sweeps” of outdoor living spaces since the declaration of the State of Emergency on Homelessness last November. During those cleanups only 126 people were connected with shelter or housing while outreach workers actually engaged 1,852 individuals. The ineffectiveness of the current protocols is also depicted in the fact that many outdoor living space cleanups are done multiple times Because of repeat processes, the City constrains its resources and the proposed legislation will help stabilize those situations to ensure neighborhood safety and health.

Councilmember Lisa Herbold (District 1, West Seattle & South Park) said, “People are sleeping outside because they have no place to go, and that’s the reality. This legislation is meant to set the parameters for what is safe and what isn’t, and it’s largely intended to inspire the City to get serious about providing stable housing opportunities for people living on the streets.”

Councilmember Rob Johnson (District 4, Northeast Seattle) said, “Reforms to the current approach are necessary to ensure we are treating our unsheltered neighbors with decency and respect. While recent steps have been made toward increasing the affordable housing stock in Seattle (such as passing the Mandatory Housing Affordability Residential framework last month), we must work in the meantime to enact better, more compassionate short term solutions. I look forward to working collaboratively with the Mayor’s taskforce, advocates, and members from the business community to make sure that we come up with an effective plan to this complex issue. ”

“If our larger goal is to transition unsheltered people and families into permanent housing, then continually displacing them, destabilizing their lives, and compromising relationships and connections to services is not producing the results we need,” said Councilmember Mike O’Brien (District 6, Northwest Seattle). “Many community members have approached me with concerns about increased garbage, human waste, and needles in their neighborhoods, which is why this legislation will require that the City provide sharps containers, public restrooms, and garbage pickup for those sites where we find unsanitary conditions. We all deserve clean and safe neighborhoods.”

Councilmember Kshama Sawant (District 3, Central Seattle) said, “Spending millions of dollars moving homeless people from one street corner to another is inhumane and ineffective. Instead, this money should be directed towards basic services and shelter. Also, the $160 million slated for a new North Police Precinct should be used to build a 1,000 units of city-owned affordable rental housing. The Council needs to address the root causes of the homelessness crisis and the lack of affordable housing.”

The legislation was developed in collaboration with advocacy organizations and homeless service providers who have the on-the-ground work experience in case management for the unsheltered, including the Seattle/King County Coalition on Homelessness ACLU of Washington, Columbia Legal Services, Public Defender Association, Seattle Community Law Association, Real Change, and people experiencing homelessness.

Councilmembers are requesting that the legislation be initially considered in the Council’s Human Services & Public Health Committee on September 14 at 2 p.m.

 

Brooklyn Man Builds Igloo In Backyard And Lists It On Airbnb

 

Brooklyn man builds igloo in backyard and lists it on Airbnb; website takes it down

BY Molly Crane-newman, Nancy Dillon

NEW YORK DAILY NEWS

Updated: Tuesday, January 26, 2016, 8:26 AM

He built a romantic “boutique” igloo in his Brooklyn backyard – then got the cold shoulder from Airbnb when he listed it for $200 per night.

Patrick Horton used the vast quantities of powder from the weekend’s historic storm to build the artisanal accommodations outside his actual residence on India St. in Greenpoint.

“We figured someone might want to take their Tinder date there and would be willing to pay for it. How many girls could say that they were taken on a date in an urban igloo? Not many,” Horton, 28, told the Daily News.

EAST COAST RECKONING WITH ‘TOP 10 SNOWSTORM’

Patrick H. Horton

Patrick Horton built this igloo outside his residence on India St. in Greenpoint.

Sadly for the aspiring proprietor, Airbnb.com iced his listing in a matter of hours Sunday, leading him to consider other options, he said.

“I think we’ll try to put it on Craigslist. We might even offer a Tinder special. Maybe throw in some Usher (background music) and a bottle of wine,” he joked Monday.

The heart-melting hideaway includes two candles for ambience, puffy pillows, animal print blankets over a tarp and even some landscaping in the form of a small tree placed near the entrance, he told The News.

Dripping with ingenuity and alt-lifestyle aura lays this Snowpocalypse’s most desirable getaway,” Horton wrote for the quickly yanked Airbnb ad.

“Built completely by hand all natural,” he said. “Come experience this chic dome-style bungalow with Bae.”

Horton even offered to throw in some shampoo.

Patrick H. Horton

“Come experience this chic dome-style bungalow with Bae,” Horton wrote on Airbnb.com before the website yanked his listing.

“We are happy to see that you guys are staying busy and having fun during Blizpocalypse. Unfortunately, your igloo, while very well constructed, has failed to meet our occupancy standards and has been removed from search results,” a rejection letter from Airbnb said.

“As an appreciator of fine igloos around the world, I did want to offer you a coupon that you can use to book your first reservation as a guest,” the letter said. “Be sure to pick a place with running water, electricity, and a roof that doesn’t melt.”

Horton was disappointed, especially considering other igloos do rent rooms on the website, he said.

“It’s way stronger than we thought,” he argued to The News. “We had four or five people in there last night. Even if you bump up against the wall, nothing falls on you. The walls are two feet thick.”

An advertising art director originally from Seattle, Horton said he and his two roommates cooked up the idea for the igloo at least two months ago, watched how-to videos online and waited for enough snow to fall.

“Unfortunately, your igloo, while very well constructed, has failed to meet our occupancy standards and has been removed from search results,” a rejection letter sent by Airbnb says.

“We had obviously never done it before, but we had fun with it, drank a couple beers,” he said.

They spent about four hours building a hard-packed pile about eight feet high on Saturday and then let it harden overnight, he said.

After another four hours spent digging out the interior Sunday and adding the finishing touches, they listed the cozy cave online.

Patrick H. Horton

The igloo was still standing Monday, he told The News, and he considered listing it on Craigslist.com.

“It was a joke, but we’re straddling the line between being satirical and serious,” he said Monday. “If someone wanted to pay $200, I would have done it. But I probably would have made fun of them.”

Horton claimed five people showed interest during the igloo’s brief window on Airbnb, but he lost the ability to contact them when the listing was deactivated.

“It was all disappeared,” he said with a laugh.

He admitted he doesn’t have igloo insurance.

“Even if it did fall, it wouldn’t kill you,” he said, mulling the idea of sleeping inside the structure himself Monday night. “Well, check back with me tomorrow.”

ndillon@nydailynews.com

    airbnb and landlord deal

    Rent your place on Airbnb? The landlord wants a cut

    Revenue-sharing model would allow apartment dwellers to market rooms through lodging website

    The Wall Street Journal

    Three of the nation’s largest landlords have held discussions with Airbnb Inc. about allowing apartment dwellers to market rooms through the company’s global network in exchange for a slice of the revenue.

    Equity Residential, AvalonBay Communities Inc. and Camden Property Trust have had discussions with Airbnb in recent weeks about joining forces, executives at each of the companies said. They all said they are interested in pursuing a revenue-sharing model with Airbnb but would need to work out details.

    The moves hold the potential to expand Airbnb’s access to rental units across the country and further formalize a business that has grown from a matchmaking service for couch-surfers into a real threat to established hotels.

    Airbnb’s service has long run afoul of many apartment companies’ contracts. A truce could allow a bigger portion America’s housing stock to be used as hotel rooms, potentially adding thousands of new listings to Airbnb’s books by allowing tenants to openly use the site rather than handing over their keys on the sly.

    Equity Residential is the largest publicly traded U.S. apartment operator, with about 108,000 units, according to the company, while AvalonBay is the second largest with 83,000 units and Camden owns about 59,000 units, according to the companies.

    “A lot of our hosts are renters,” said Christopher Nulty, an Airbnb spokesman. “Any solution we would be able to identify would be a win-win-win for everyone involved.” Earlier this year, Airbnb tapped a former San Francisco real-estate executive for a position dedicated to forging partnerships with apartment operators.

    Home dwellers who use Airbnb’s website to list rooms or entire homes for rent pay Airbnb a percentage of the nightly rate. But most apartment leases have restrictions that forbid tenants to sublet or to do so without permission. That has made many of the apartment dwellers who advertise their units on Airbnb’s website subject to possible eviction, a hurdle to Airbnb’s growth thus far.

    Nevertheless, Airbnb, founded in 2008, now lists about 322,500 accommodations in the U.S., up 80% from a year earlier, according to the company. It generated $340 million of revenue in the third quarter, on bookings of $2.2 billion, according to an investor presentation earlier this year reviewed by The Wall Street Journal.

    Airbnb’s valuation has ballooned as home dwellers and travelers have embraced the service. As of last month the San Francisco-based company was valued at $25.5 billion, almost matching Equity Residential’s $28 billion market capitalization.

    “You just can’t turn your head or keep your head in the sand over what’s going on,” said David Santee, Equity Residential’s chief operating officer. A potential deal is “just a way to figure out how can everybody coexist, bring transparency and figure out a way that everybody can win.”

    Kristy Simonette, chief information officer at Camden, said the company is in early talks with Airbnb about a partnership. “While it’s a little scary, we do think there’s a play there,” she said.

    Tim Naughton, chief executive of AvalonBay, said in a conference call in late October that the company is deciding “whether we want to embrace it.”

    Airbnb has struggled to win support from some local political officials, tenants groups and rental property owners, however. Critics warn that apartments could essentially be converted into hotel rooms, depleting the rental stock in cities with housing crunches, such as New York, San Francisco and New Orleans.

    Such a deal could place Airbnb under additional scrutiny from lawmakers by seeking to legitimize the use of apartments as hotel rooms. Lawmakers in some cities are seeking to crack down on the practice, arguing that it takes units off the market for local residents and that apartment buildings don’t adhere to the same fire and safety codes as hotels.

    “I’m sort of appalled that Airbnb thinks the next answer to their problem of not running a legal business is to try to convince some number of landlords … that they can get in on the deal,” said New York State Senator Liz Krueger, a Democrat and vocal opponent of Airbnb.

    Executives at the three apartment companies said they plan to examine local laws carefully to ensure they don’t run afoul of them. Mr. Santee, of Equity Residential, said they would only let residents rent units out on Airbnb occasionally, ensuring they don’t get converted into full-time hotel rooms.

    Airbnb officials have said in the past that the vast majority of its users are renting out their apartments only occasionally on the site, helping them afford rapidly rising rents in those cities.

    Some landlords are hostile to Airbnb because tenants are able to make money off their units with no direct financial benefit to the landlord. Others are concerned that having people staying in their buildings who haven’t undergone the same background checks puts existing tenants at risk of having to deal with noisy partyers or unsavory characters.

    Airbnb officials said residents have an incentive to screen candidates looking to stay in their homes. The website also allows hosts to rate guests, providing a check on unruly users.

    In San Francisco’s recent battle over Airbnb, the San Francisco Apartment Association, a landlord group, joined forces with tenant groups to support Proposition F, a ballot measure that limited the number of nights a year a unit could be rented out to 75.

    Landlords and tenants “are normally at one another’s throats,” said Dale Carlson, co-founder of ShareBetter San Francisco, which helped lead the fight for the ballot measure. Instead, he said, the groups wrote the anti-Airbnb measure together. “The apartment association catered lunch and it wasn’t poisoned,” he said.

    Major landlords, such as Related Cos., have moved to evict New York tenants who rent out their units, citing local laws that prohibit renting out a multifamily unit for less than 30 days if the resident isn’t present.

    Airbnb got its start appealing to travelers seeking a less corporate, more informal local experience than traditional hotels. But as the company grows, it has been seeking ways to formalize its business, such as by offering to pay hotel taxes in some municipalities and venturing into the professional vacation rental business by developing software that would help link property managers to the site.

    But landlords could stand to benefit from a hookup with Airbnb. They could impose a fee to tenants for allowing them to rent out their units, apartment executives and analysts said.

    Landlords also could find it easier to pass along rent increases. If tenants can get $300 a night renting their room from time to time, it is easier for landlords to keep pushing steep rent increases, the apartment executives and analysts said.

    “For those that are pushing the threshold of affordability, maybe they can do an Airbnb or two a month,” said Wes Golladay, an analyst at RBC Capital Markets. “Maybe it’s affordable and they can stay.”

    Overhaul of rules on underground utility lines includes stiffer fines: Spokesman Review

    According to Scott Maben at Spokane’s Spokesman Review, penalties for buried utilities will be rising from $1000 for an initial violation to $5000!

    Digging up buried utility lines may give you the shock of a lifetime. But it will zap your wallet as well.

    Anyone who fails to use Washington’s free “Call Before You Dig” service and who unearths gas or electric lines faces stiffer penalties this year.

    As homeowners, landscapers and excavators get busy outdoors each spring, utilities and state regulators ramp up their reminders to call 811 at least two business days before digging. It’s required by state law and is intended to prevent injuries, property damage and outages.

    Read the rest of Scott’s article.

    Remember, real estate law isn’t just about property lines and title disputes.  If you’ve got questions about any kind of property law give us a call.

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