Seattle is an attractive city to everyone, given its mountainous landscape, endless job opportunities, tourist spots, and more. However, aspiring residents are often intimidated to live here due to high housing costs.
Are homes in this city as expensive as many claim to be? Our team of real estate experts will elucidate in this guide the average costs and expenses of owning a home in Seattle.
Average Home Prices in Seattle
Seattle, the city known for its famous Space Needle, has been eye candy to many. According to U.S. News, the city is in the top ten best places to live in the U.S.
Given its security, appealing job opportunities that come with inflated salaries as well as surrounding flora and fauna, it’s no wonder that house prices are always on the rise.
Interestingly, house prices in 2020 sustained its growth, and the cost of building materials, and long-term supply constraints drove prices overboard. According to the U.S. National Home Price Index, home prices rose by almost 18.6% over the last twelve months.
The average house price has never declined since the beginning of the last decades. In 2021, a three-bedroom bungalow rose by 7.6%, selling at a median price of $800,000, while condo prices are a little above half the cost of an apartment.
Average Price Per Square Foot in 2020
The average price per square foot depends on the house type. Our real estate team says that single-family homes cost an average of $484, while the price per square foot for condos goes for $544.
There’s been a shift in price trends in Seattle’s housing market since 2000. Although 2020 experienced somewhat slow growth, 2021 witnessed an explosion. It is all due to the continuous influx of people, which drove demand and house prices upwards.
The average cost of homes rose significantly from 2010 until today.
Seattle has more than a hundred neighborhoods. These neighborhoods started as small communities before evolving to districts and then to the Seattle we all know today.
Interestingly, each neighborhood has a distinct feature, making the pricing for homes in the city different. For instance, the University District is a popular area for students. So, it’s the first choice of location for many students coming to Seattle.
West Seattle is predominantly occupied by families due to the abundance of single-family homes. This area is separated from other neighborhoods by the Duwamish River. Here, you will find several parks, waterfronts, and other magnificent structures.
Capitol Hill is another great neighborhood. This area serves as the center of entertainment and arts. From low-income to high-income earners, this neighborhood caters to everyone.
Factors Behind the High Housing Prices in Seattle
Supply and Demand
The continuous imbalance in supply and demand is the major factor responsible for the high housing costs in Seattle. This demand and supply constraint is affected by zoning regulations and the high costs of building materials. The pandemic drove prices of building materials to record highs between May 2020 and May 2021.
For example, lumber increased by over 114% during that period. Iron and steel increased by over 73% during that period too. While lumber prices have declined by 20%, the gap between supply and demand is still not bridged.
IHS Global Insight ranks Seattle as the 11th largest metropolitan economy in America, making it a perfect place to do business. This is another driving factor because, with an increase in population, demand rises, so the cost of housing inclines.
The mortgage rates in the city are considered as historically low. It made borrowing more affordable, especially for those with good credit histories, thus fuelling demand in a market with supply constraints.
Cost of Living
Seattle is the fifth most expensive city in the United States after New York, San Francisco, Honolulu, and Brooklyn . There’s no doubt that the cost of living will be high. One factor that contributes to this is the inflated salaries of workers.
Thanks to companies, such as Boeing, Microsoft, and Amazon, Seattle employees earn handsomely. A typical worker in the city earns 12% more than the average American. Hourly wages are also higher than the average national wages.
The notion that these workers can afford anything in Seattle has driven prices of goods and services upwards – one that resulted in the high cost of housing.
What is the average cost of housing in Seattle?
The average cost of housing in Seattle depends on the house type and number of bedrooms. Typically, single-family homes cost more than other house types. A two-bedroom goes for $620,000, while the median rent is $1,659.
As explained by our team of real estate experts, the average home prices in Seattle differ by type of home and area in the city. Apart from identifying the prices of homes in the city, many make the mistake of relocating without factoring in the cost of living and other expenses. Our experts advise considering these too so you can plan your budget holistically.