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Medawar Market Musings | December 2024

Sayonara Seattle Single Family Zoning

In 2023 the State of Washington legislature and governor passed bipartisan House Bill 1110 with an intent to increase housing supply. One of the primary drivers of housing supply shortages in the United States is restrictive zoning that limits the density of new housing construction. The vast majority of Seattle is zoned as neighborhood residential limiting the number of units to a single-family home plus the potential for two accessory dwelling units. HB 1110 is meant to force cities like Seattle to allow a minimum of 4 homes on ALL residential lots and 6 in some cases.

On October 16, the Mayor’s office released a new zoning plan intended to comply with the requirements set forth in HB 1110. The plan allows for duplexes, triplexes, and quadplexes across all Neighborhood Residential zones. The law allows additional units to be built if certain affordability requirements are met and allows corner stores to be built on corner lots in Neighborhood Residential Zones.

The City is taking public comment until December 30, 2024.

I expect the new zoning to have the following effects:

• Housing supply will increase over the long term

• Housing prices will be lower than they would have been without the zoning change

• Many folks will be upset with the changing character of their neighborhoods as lawns are replaced with housing and older homes are replaced with modern construction.  

• We will have a healthier, more vibrant and livable city. Increased density will result in more walkable and bikeable neighborhoods and neighbors of wider income ranges.

• Most “affordable” housing will be in the form of very small studio and one bedroom units who’s market rents are closer to the allowable rents under the affordability guidelines.

• Very few corner stores will be built. A quadplex is easily financed using residential financing. A 5 or 6 unit apartment is easily financed using commercial financing. A quadplex with a 5th unit corner store retail requires a niche lender and will be much more difficult to obtain financing.  

If you are interested in building on your property do not hesitate to reach out. I can help you understand the investment potential of your property and I can refer you to wonderful architects. Seattle’s future is bright even without single family zoning!

Housing Market Updates

From the NWMLS: Persistently high prices put strain on market affordability.

Published on: December 4, 2024

Northwest MLS, the source for the most current, accurate market listing data in Washington state, today released its Market Snapshot for the month of November 2024.

Market Recap

The seasonal slowdown of the real estate market has begun, as evidenced by the month-over-month decrease of active listings by 15.1% from 14,795 active listings in October 2024 to 12,558 active listings in November 2024. However, the market still shows signs of improvement year-over-year, with a 23.4% increase in active listings and an increase of 24.7% in closed sales (5,446) compared to November 2023 (10,177 and 4,367 respectively). The missing piece of the equation for potential buyers continues to be affordability, with the median sales price increasing 7% to $645,000, compared to $601,342 in November 2023.

Steven Bourassa, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington, sees reasons for optimism in the recent developments in the Washington Legislature intended to promote the production of more housing and thereby lower prices. Among some of the new laws coming into effect in the next couple of years will be an increase to density in residential areas and the promotion of accessory dwelling units (ADUs). “It will take time for these new laws to actually produce new housing,” said Bourassa, “but the expectation is that they will help in an important way to moderate the cost of homeownership.”

November 2024 Key Takeaways

Active Listings

• The number of homes for sale increased year-over-year throughout the NWMLS coverage area, with 23 out of 26 counties seeing a double-digit increase compared to November 2023.

• The five counties with the highest increases in active inventory for sale were Grant (+46.9%), Clallam (+40.4%), Kittitas (+39.7), Chelan (+33.6%) and Island (+33.3%).

Closed Sales

• There were 5,446 closed sales of residential homes and condominium units, an increase of 24.7% when compared to November 2023 (4,367).

• The total dollar value of closed sales in November 2024 for residential homes was $3,883,768,625 and was $428,244,300 for condominiums ($4,312,012,924 in total), an increase of 31.7% when compared to November 2023.

 

Median Sales Price

• Although the median price slightly decreased by .77% from $650,000 in October 2024 to $645,000 in November 2024, prices increased year-over-year by 7.3% when compared to November 2023 ($601,342).

• The three counties with the highest median sale prices were San Juan ($857,500), King ($837,350), and Snohomish ($760,000), and the three counties with the lowest median sale prices were Ferry ($209,900), Columbia ($262,000) and Adams ($309,150).

Consumer and Broker Activity

NWMLS also provided insights into consumer activities during the month of November 2024:

• Keyboxes located at listed properties were accessed 111,482 times in November 2024, a 24% decrease in activity from October 2024 when they were accessed 146,608 times. Keybox activity increased by 14% year-over-year, with keyboxes being accessed 97,611 times in November 2023.

• The total number of property showings scheduled through NWMLS-provided software decreased 23% from 110,736 in October 2024 to 84,997 in November 2024. This was a year-over-year increase of 17% from the number of showings in November 2023 (74,826).

• In November 2024, there were 14,887 listed properties that were eligible for the Down Payment Resource (DPR) program offered by NWMLS, a 23% year-over-year increase of 14% from November 2023.