Vancouver may hog all the headlines as the west coast’s hottest real estate investment market, but Seattle is hot on its heels.
The State of Washington’s largest city has quietly stolen tech talent from San Francisco—where, like Vancouver, the cost of living has soared beyond most residents’ means—and, as a result, companies have begun migrating north.
Bob Kagan, senior vice president of Laconia Development, which based in the San Francisco area, says Seattle has grown into the United States’ most predictable city—a siren song for real estate investors, to be sure.
“The city represents relatively moderate risk,” said Kagan. “I’ve often said Seattle is San Francisco’s most northern suburb because it’s not only physically like San Francisco, but the job base—the economic base—is the same. San Francisco is clearly dominated by Silicon Valley, and now Silicon Valley companies are moving to Seattle.
“Seattle, in our judgement, is five years behind San Francisco—I can look at the commercial and residential properties in San Francisco today and say that is what Seattle will be five years from now, and history has proven this. It makes investment less risky than in other places because we can pretty much tell what our condos, what our rents, are going to be worth five years from now and we can make plans across those lines. Job growth in Seattle’s urban core is phenomenal.”
Throw in the fact that Washington is an income tax-free state and Seattle’s emergent status as a commerce hub makes even more sense.
According to Dean Jones, CEO of Seattle-based Realogics Sotheby’s, a major shift occurred in the city’s real estate market when the Obama administration extended Visas to 10 years for Chinese tourists and businesspeople.
“In 2012, I started making trips over to Mainland China and Hong Kong to raise visibility for our region and by 2014 the Obama administration changed its visa policy. There’s been an uptick since then,” said Jones.
“There’s been a dramatic economic impact and positive investment trajectory in the last 10 years because there’s a tremendous amount of job growth and rental demand. Both foreign and local investors have enjoyed buying condominiums and renting them out, and as a result there have also been dramatic median home price increases, which have paved the road for savvy investors.”
Seattle has the second most cranes in the sky in North America, after Toronto, and while the ratio is 3:1 in the latter’s favour, the Emerald City has nonetheless become a favourite west coast gateway.
“It’s further impelled by the fact that Vancouver’s trajectory may be less certain because of the foreign buyer tax policies and the fact that it’s a much more expensive market with weaker job prospects than what we’re seeing 150 miles south in Seattle, where prices are easily half of what they are in Vancouver and where there’s also strong demand for rental housing.”
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