Seattle is a beautiful city known for its famous Space Needle, parks, beaches, deep forests, and incredible mountain views. It’s no wonder why it’s a natural choice for many to live in.
However, the high cost of houses in the city is a turnoff for many. In this guide, our housing experts answer if living in the Emerald City really is worth the splurge and all the contributing factors behind its exorbitance.
What Makes Seattle Real Estate Expensive?
Seattle real estate is a thriving housing market, but its ludicrous costs have always been a subject of questions and discussions. People wanting to relocate to the city often wonder what factors drive the costs of houses.
Housing Prices Vs. Income
Employees in Seattle earn an average of $70,000 a year – 12% more than what an average employee in other cities receives. This huge paycheque comes due to the availability of tech jobs and manufacturing jobs, thanks to Microsoft, Boeing, and Amazon.
Workers in the city are paid handsomely. Since they have lots of money to throw around, house owners jack the prices of their properties up. They know that these people can afford it, so they don’t mind.
Comparison to the Average Cost of Housing
The average cost of housing in Seattle starts from around $890,000 for buyers. For a two-bedroom apartment, the rental price starts from $2,550. It is way more than the average price.
According to Council for Community and Economic Research Q1 2021 report, Seattle is 115% more expensive than the average city in a list containing 257 cities.
The average cost of housing is pretty high, but Seattle isn’t the most expensive city to live in. Compared to other cities in the United States, Seattle is ranked fifth behind Brooklyn, Honolulu, San Francisco, and New York.
The fact is the cost of land in this beautiful city is expensive, and it’s one of the biggest factors that contribute to Seattle’s exorbitant real estate prices. When the land becomes pricey, you shouldn’t expect the house to be affordable. So, why is Seattle real estate so expensive? It all boils down to zoning regulations.
Zoning regulations specify the type of property that should be built in a specific territory. These laws are created by the government to control the development of lands and restrict a particular zone to a specific type of property.
For residential purposes, about 70% of lands in the city are restricted for the building of single-family homes, while the remaining 30% are for other house types. Because of this zoning, scarcity is created. It becomes complex for those in other industries to purchase land, thus driving prices up.
Single-family homes are expensive. Several young, unmarried people coming into the city prefer affordable apartments to single-family homes. Because of zoning, those houses are scarce, and the available ones for rent are pretty high.
Standard of Living
Standards of living include transportation costs, utility bills, etc. The average cost of gas in Seattle is $3.20, which is a few cents above prices in other states. Residents pay close to $3 to get on the train and about $2 for bus fares.
In general, it costs more to get around Seattle because of workers’ wages. It translates to a higher cost of houses.
Area of Choice
Like our housing experts had mentioned, Seattle has an incredible mountain view. The landscape is mountainous and hilly, unlike other cities that are flat. Unfortunately, these areas make it impossible to erect houses.
As a result, people compete for habitable areas for building. This competition aggravates demand, thus, driving home prices up.
Companies Based in the City
Seattle is known as a tech city, given that the two biggest companies are headquartered there – Amazon and Microsoft – the two largest employers of labor in the city.
It’s no surprise that tech-savvy individuals and software engineers are flooding the city. But, the influx of these people increases the population, which further elongates the gap between supply and demand.
When demand increases and supply contracts, house prices become expensive. As our real estate experts mentioned, people know that these employees earn handsomely from these companies, so they aren’t afraid to raise the prices of homes.
Seattle is a big attraction to many. Aside from the huge paycheque, it is known for its temperate climate. Whether summer or winter, it’s always comfortable to stay in the city.
People also prefer to live near the beach, parks, forests, etc., where nature will be closer to them. Seattle has all these, which as a result, drive house prices up.
Many people fancy living in Seattle, but the high cost of living and housing tends to turn people off, and eventually ask why is Seattle real estate so expensive.
Seattle is an expensive city to live in because of the several factors outlined by our real estate team in this article. Though costly, it’s a beautiful place to live in that has it all for many.