High tech and higher taxes influence the Seattle metro area housing market at both ends of the price spectrum; brokers predict further escalation | State News
SEATTLE, July 23, 2021 / PRNewswire-PRWeb / – Executives at Realogics Sotheby’s International Realty (RSIR) have witnessed a meteoric rise in buyer demand as inventories fell in the first half of 2021 from a year earlier. This has propelled the trend for both more affordable prices in the region with city condominiums, as well as high-end with waterfront estates, which are setting new benchmarks. According to Trendgraphix research, downtown new condominium sales Seattle have skyrocketed in 2021 by over 600% so far, while resales have also jumped 67% (and active resale listings have fallen almost 46%). Meanwhile, sales of waterfront homes in Eastside’s popular submarkets have increased by more than 50% since the start of the year in 2021, while inventory levels have fallen by 60%. %. Not surprisingly, the volume of off-market sales has also increased significantly, including the record sales negotiated by RSIR.
âHigh tech and possibly higher taxes to come are motivating savvy buyers to act as early as possible in the future. Seattle/Nice view metropolitan area, âsaid Dean Jones, President and CEO of RSIR. “There is a lot of job growth among the tech titans and a repopulation of urban campuses has revived the demand for city lifestyles.”
Jones believes the recent proclamation that Washington state will impose a 7% capital gains tax in 2022 has prompted those with large equity portfolios to consider selling shares and focusing on real estate, which will be exempt from this additional taxation. It also helps if record stock prices are recorded at Amazon, Microsoft, Facebook and Alphabet (Google) to name a few of the region’s top employers. Industry experts say restricted stock units (RSUs) or stock awards can account for 60% or more of tech worker compensation, much higher in higher-level positions. Thus, a bullish stock market and the corresponding wealth effect have found their way into local real estate trends.
Michael kropp is a 35-year veteran of the local tech industry and he and his wife, Susan, have become empty nests. They recently decided to list their waterfront home in Medina, depending on the demand for summer lifestyles, but also in anticipation of impending changes in the fiscal climate at state and federal levels. The 3,000-square-foot move-in-ready and refreshed home with 70 feet of shoreline waterfront includes just over half an acre of land and is listed for $ 6,638,000 as if. Or on the contrary, for $ 14,000,000, the Kropps are proposing preliminary plans for a new 8,000 square foot construction area (plans and permits pending) on ââthe property.
âIt’s about time,â the Kropps said. “Between the impacts of proposed capital gains tax increases under the Biden administration and the prospect of selling stocks in 2022, the difference for consumers could be 17% or more if they wait too long. long, despite what rising market conditions also dictate given supply. and demand imbalance. “
Kropp considers the Seattle/Nice view region under the name of “Silicon Valley North” and proclaims the region to be the “Cloud Computing Capital of the World”, which it believes will support wealth creation and increase demand for luxury lifestyles and especially waterfront properties, which are inherently limited. Others agree that the tech market is booming. Recently, commercial real estate company CBRE said that Seattle had the fastest growing tech job market in the United States Meanwhile, the Q2 Venture Monitor reports a record volume of seed capital raised in the first half of 2021 through 205 deals and $ 3.1 billion in funding, which more than doubled what was raised at that time in 2020.
âLocal buyers and buyers who move see the relative value of residential properties, even as prices continue to climb,â said Becky Gray, founding member of RSIR Nice view branch and listing broker of the Kropp property. “These incoming buyers from more expensive markets with higher taxes, like California, see our market as having a long way to come. As wealth increases, the sensitivity to income taxes will also increase and this bodes well for increased demand for Washington state residence.”
Gray further points to an unbalanced relationship between median household income and the median price of housing in the Seattle/Nice view region relative to other West Coast gateways such as the Bay Area, or Southern california. Some buyers are acquiring homes in the Seattle area as their primary residence with the intention of living here for most of the year, but maintaining their former home in California as a second home, she said, to deflect income taxes in the Golden State.
âWe are ready to increase further,â Gray adds. âTaking into account the looming tax considerations, I think we’ll see an even stronger second half through 2021. Consumers are settling into a post-COVID reality and there is plenty of cash and an equal amount. of desire to live our best life with the challenges of this pandemic now, hopefully, behind us. “
Jones agrees and thinks that Washington turns out to deserve his nickname of Evergreen state.
âOur region’s economy and favorable tax climate help drive higher incomes and allow residents to keep more,â Jones concludes. âWhile the new capital gains tax is important, at least it’s only triggered by the sale of fixed assets, rather than income, and real estate is excluded. As a result, I think we will see an increase in real estate ownership, especially among Millennial tech workers who are currently renting out and who will seek tax breaks and capital appreciation in the future. “
Other considerations weighing on sophisticated consumers include historically low but rising mortgage interest rates; general construction cost inflation (including supply chain barriers for replacement housing) and land scarcity – all fundamental factors driving up median home prices in the Northwest region of the Pacific.
About Realogics Sotheby’s International Realty – Realogics Sotheby’s International Realty (RSIR) is one of the leading global sales and marketing brokerage firms in the Pacific Northwest. The boutique real estate firm of more than 300 branches of brokerage services active in the city center Seattle, Bainbridge Island, Kirkland, Madison Park. Mercer Island and city center Nice view. RSIR is also a leading project marketer, currently representing and advising over $ 1.5 billion in new condominium developments planned throughout the Puget Sound area. http://www.RSIR.com
EDITORS ‘NOTES: Market data, graphics, project photographs, and major shots are available.
SOURCE Reallogics Sotheby’s International Realty