The best places to invest in real estate should meet several requirements in terms of profitability and long-term viability. When it comes to US real estate, few areas satisfy these criteria as well as the Seattle real estate market. In fact, this is one of the strongest markets in the country and savvy real estate investors can generate great returns from it. Let’s take a look at the Seattle housing market and outline some of the reasons why you should consider investing in it.
Seattle Real Estate Market Outlook
Before making a Seattle real estate investment, you must first be aware of the main trends that will shape the market in the near future. Our Seattle real estate market forecast takes into consideration all the variables that affect the housing market. Here are the Seattle real estate market trends that you can expect.
1- Home prices will remain flattish
One of the most encouraging trends in the Washington State housing market is the correction of Seattle home prices. In fact, the market seems to have hit a plateau in the past couple of years as prices have steadily decreased. Recent data from Zillow predicts a mere 0.5% increase in investment property value over the next 12 months. Needless to say, this is an ideal situation for future Seattle real estate investors as properties in the city have yet to rebound from the price correction.
2- Seattle will be a buyer’s market
Real estate investing can be profitable in a buyer’s or a seller’s market alike. However, finding good real estate deals is much easier in a buyer’s market. A cooler market such as Seattle provides the buyer with more alternatives and therefore more leverage over the seller. Furthermore, a market that leans towards the real estate investor is inherently less competitive and offers more favorable mortgage terms.
Related: How to Differentiate Between a Buyer’s Market and a Seller’s Market in Real Estate
3- California exodus will continue to drive the Seattle Washington real estate market
One consistent trend that has dominated the region in recent years is the influx of California residents fleeing the state’s high prices. In fact, 7% of the tech talent that relocated to the city in 2017 came from the Bay Area and the trend is expected to continue in the coming years. As a result, the demand for Seattle rental properties will remain strong.
4- Seattle is relatively landlord-friendly
The relatively lax laws is another reason why you should consider investing in Seattle real estate. While not as landlord-friendly as some other jurisdictions, the Seattle real estate market provides a more favorable regulatory environment than Oregon and California. For example, tenants are liable for rent payments throughout the period of the lease if they unilaterally break the agreement. Moreover, landlords have the right to end a month to month lease three weeks before the end of the month with a simple written notice.
Related: Invest in Real Estate in the 5 Most Landlord Friendly States
5- The area is a vibrant student market
Another factor that will provide continuing support to the local rental market is the large student population in the city. The Seattle area is home to no less than 21 four year colleges, making it one of the largest student hubs in the country. While this massive student presence does not affect Seattle investment property sales, it ensures a healthy baseline demand for rental properties in the city.
6- The city’s tourism sector is as strong as ever
When looking for where to invest in real estate, a booming tourism sector is always a factor to keep in mind. A city that attracts millions of visitors on a yearly basis is perfectly suited for a short-term rental strategy. In the case of the Seattle real estate market, the strength of the local tourism sector guarantees constant demand for Seattle short-term rentals. Seattle attracted more than 40 million visitors in 2018, a figure that places it in the top 10 most visited cities in the US.
7- Airbnb Seattle regulations are not stringent
While operating a short-term rental is subject to several requirements, the Seattle real estate market remains Airbnb-friendly. This is especially the case when comparing Seattle Airbnb laws to more strict regulatory frameworks such as those in the New York real estate market and the Los Angeles real estate market. Here are the current Airbnb regulations that you need to know about:
- You need to have a business license tax certificate and a regulatory license for STRs.
- You can operate a maximum of two units; the primary residence and a secondary unit.
- Non-owner occupied rentals are legal.
- The units should meet the city’s building and safety codes.
Now that we have gone over Seattle housing market predictions and trends, let’s check some city-wide data and outline some of the areas where you should invest in Seattle real estate.
Seattle Real Estate Market Data
- Median Property Price: $737,102
- Price per Square Foot: $504
- Average Days on Market: 69
- Monthly Traditional Rental Income: $2,385
- Traditional Cash on Cash Return: 1.2%
- Monthly Airbnb Rental Income: $2,551
- Airbnb Cash on Cash Return: 0.9%
- Airbnb Occupancy Rate: 61.1%
Data for the Best Neighborhoods in Seattle
Best Neighborhoods for Airbnb Rental Property
Uptown
- Median Property Price: $350,125
- Price per Square Foot: $596
- Average Days on Market: 73
- Monthly Airbnb Rental Income: $3,324
- Airbnb Cash on Cash Return: 4.8%
- Airbnb Occupancy Rate: 68%
First Hill
- Median Property Price: $637,296
- Price per Square Foot: $571
- Average Days on Market: 72
- Monthly Airbnb Rental Income: $3,729
- Airbnb Cash on Cash Return: 4.6%
- Airbnb Occupancy Rate: 86%
Dunlap
- Median Property Price: $380,000
- Price per Square Foot: $307
- Average Days on Market: 115
- Monthly Airbnb Rental Income: $3,523
- Airbnb Cash on Cash Return: 3.8%
- Airbnb Occupancy Rate: 74%
Best Neighborhoods for a Traditional Rental Property
Maple Leaf
- Median Property Price: $534,784
- Price per Square Foot: $453
- Average Days on Market: 32
- Monthly Traditional Rental Income: $2,644
- Traditional Cash on Cash Return: 4.3%
Alki
- Median Property Price: $710,000
- Price per Square Foot: $490
- Average Days on Market: 12
- Monthly Traditional Rental Income: $3,591
- Traditional Cash on Cash Return: 2.4%
Loyal Heights
- Median Property Price: $546,091
- Price per Square Foot: $553
- Average Days on Market: 31
- Monthly Traditional Rental Income: $2,776
- Traditional Cash on Cash Return: 2.0%
The Bottom Line
As you can see, the Seattle real estate market offers investors promising prospects. The housing market is anchored by strong fundamentals and the city’s growing base of renters ensures the long-term sustainability of any rental strategy. To get started in Seattle real estate investing, use the Mashvisor Property Finder to find hundreds of profitable Seattle homes for sale! For more valuable tips, you can also check out our blog.
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