Seattle Housing Market 2019: 5 Best Places to Invest

As the Seattle housing market continues to correct itself in 2019, buyers now have a better chance of buying a house in Seattle for investment. With prices coming down from the market’s peak point and inventory of properties on the market going up, real estate investors are recommended to make a move on this city. Mashvisor’s data will tell you exactly where to invest in for optimal results.

2019/2020 Seattle Housing Market Forecast

Before we jump into the best places for investing in Seattle real estate, let’s cover some key housing market trends first.

Property Prices Are Dropping

The fast rise in prices of Seattle houses for sale just two to three years ago left the city a hot seller’s market. However, according to Zillow, the median home value in the Seattle housing market has dropped 4.5 percent since last year and is currently $717,800. Market values are expected to go down another 3.8 percent for the coming year and with this drop in value comes a drop in property prices.

Although a drop in home values isn’t typically the thing a real estate investor wants to hear, this information shouldn’t be treated as a negative thing. When you take into consideration the large boost in property prices over the past years, you’ll realize the drop happening now is simply the real estate market restoring some balance and returning to a healthy state.

Ample Opportunity for Both Single-Family and Multi-Family Investors

An important factor to consider when searching for Seattle investment properties is the types of housing available in the city. What is available in the Seattle housing market, and what should you invest in?

The first thing you should know is that the real estate market has a good percentage of renters (53.5 percent). Seeing that over half the market rents their housing, rental property owners can be confident with the rental demand in this market.

Seattle housing stock is 42.6 percent single-family detached homes and 45.4 percent apartment complexes. So whether you’re a multi-family investor or a single-family home investor, you’ll be able to find enough listings and renter demand to choose from for a successful real estate investment in both property types in this buyer’s market.

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Job Growth Could Mean an Increase in Renters

The State of Washington has been witnessing positive job prospects since the beginning of the year, and all industries are experiencing some employment growth. This is even more impressive when you consider the fact that the state was expected to experience a slowdown in the job market. But according to data from the Economic and Revenue Forecast Council, Washington’s overall growth ranked the 5th highest in the US.

King County, where Seattle is located, witnessed increases in all industries, and most impressively in the tech industry. An 8.9 percent increase in jobs last year and a projected total of 5 percent increase for 2019 is a great indicator of a healthy job market and a growing rental market.

Properties Are Spending More Time on the Market

A buyer’s market could be explained by a drop in prices or interest rates, but the effect of an increase in the number of for-sale property listings has widened the options for buyers. In a seller’s markets, buyers are usually rushing to close on the first good investment property they find. However, buyers now have the luxury to take their time going through the wide selection of housing inventory on the market. This means properties are now taking a little bit longer to sell. This trend was clear from the beginning of the year when median days on market for Seattle homes was 47 days in Jan 2019 (15 days longer than the same period last year).

Lenient Short Term Rental Laws in the Seattle Housing Market

Having covered some info on the long term rentals in the Seattle housing market, it’s only fair we talk about short term rentals, specifically Airbnb Seattle investment property. With regulators adding new restrictions on Airbnb rentals in cities across the nation, it’s only natural for you to wonder, “Is Airbnb legal in Seattle?”

Yes, Airbnb is legal in the Seattle housing market. However, the City of Seattle did introduce some regulations on short term rentals in December of 2017 which are still being implemented today. Some key takeaways from ordinance 125490 are:

Beginning in September 2019, online rental platforms are required to submit reports and fees to the city reflecting the number of their licensed operators and booked nights.
Short term rental operators in Seattle must apply for two licenses. A Seattle business tax license and a short term rental regulatory license (also called an operator’s license).
You are allowed to operate a maximum of two properties as short term rentals. However, if you choose to operate two short term rentals, one must be your primary residence.
Non-owner occupied short term rentals must comply with the Seattle Rental Registration and Inspection Ordinance. This is just to ensure that your property follows all health and safety regulations.

Find a Profitable Airbnb Investment Property

Investing for High Return: Best Neighborhoods in Seattle

Obviously, you want your Seattle real estate investment to be successful and generate a profit. To make sure you’re choosing an investment property in the right location, check out Mashvisor’s data for the Seattle housing market 2019. After listing our data on the Seattle market as a whole, we’ll tell you where to find the best neighborhoods.

Mashvisor’s City-Level Data

Median Property Price: $739,706
Price per Square Foot: $501
Average Days on Market: 51
Monthly Traditional Rental Income: $2,372
Traditional Cash on Cash Return: 1%
Monthly Airbnb Rental Income: $2,753
Airbnb Cash on Cash Return: 1%
Airbnb Occupancy Rate: 55%

1) South Park

Median Property Price: $316,120
Price per Square Foot: $281
Average Days on Market: 66
Monthly Traditional Rental Income: $1,934
Traditional Cash on Cash Return: 3%
Monthly Airbnb Rental Income: $3,172
Airbnb Cash on Cash Return: 7%
Airbnb Occupancy Rate: 54%

2) North Delridge

Median Property Price: $529,450
Price per Square Foot: $373
Average Days on Market: 65
Monthly Traditional Rental Income: $2,560
Traditional Cash on Cash Return: 2%
Monthly Airbnb Rental Income: $4,898
Airbnb Cash on Cash Return: 6%
Airbnb Occupancy Rate: 54%

3) Olympic Hills

Median Property Price: $557,500
Price per Square Foot: $414
Average Days on Market: 41
Monthly Traditional Rental Income: $2,717
Traditional Cash on Cash Return: 2%
Monthly Airbnb Rental Income: $4,337
Airbnb Cash on Cash Return: 4%
Airbnb Occupancy Rate: 41%

4) Uptown

Median Property Price: $450,832
Price per Square Foot: $737
Average Days on Market: 85
Monthly Traditional Rental Income: $2,553
Traditional Cash on Cash Return: 3%
Monthly Airbnb Rental Income: $3,102
Airbnb Cash on Cash Return: 3%
Airbnb Occupancy Rate: 64%

5) Highland Park

Median Property Price: $445,560
Price per Square Foot: $334
Average Days on Market: 71
Monthly Traditional Rental Income: $2,717
Traditional Cash on Cash Return: 3%
Monthly Airbnb Rental Income: $2,523
Airbnb Cash on Cash Return: 3%
Airbnb Occupancy Rate: 55%

The Seattle housing market is going to continue to be more attractive for buyers in 2019, and there’s nothing stopping you from investing now. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.

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