Summer Fest Street - the beer garden chatter

Summer Fest didn’t disappoint this year! With near perfect weather and people ready to enjoy their neighbors for this annual celebration of West Seattle, we had and heard many conversations. Here are a few of the highlights of some of the things people wanted to talk about:

Beer Garden chatter

How’s the market?

It’s the question everyone always asks, no surprise. And the answer is largely unchanged, we still lack inventory, people are still moving in from out of area, prices continue to rise… kind of.

Inventory

Interest rates make it particularly hard for “move-up” buyers. People that need to sell to allow themselves to buy a bigger home (because they have settled into their careers, they have a growing family, or maybe they need to have space for their parents). And because interest rates have changed so much, if you think about that people stay in their first home about seven years, what someone paid in price and their interest rate in 2017 looks very different today.

In 2017 the median price was just over $600,000 and the interest rate was about 4%, resulting in a mortgage payment of about $2800/month.

In 2024 the median price for West Seattle is $850,000. And our current interest rate is 6.75% resulting in a payment of $5,500.

But move-up buyers are really looking at move-up homes so that right now is $1.25 million. So playing this scenario out, the move buyer paid $600k for a house that’s now with $850k (they have $250k in equity). They put 20% down and have paid down their principal a little (about $150k more equity). This results in a $1.25 million purchase with $400k down and and the $850k mortgage amount and the $5500 payment.

Effectively their cost for housing on a monthly basis doubled in seven years. And for the average West Seattleite, their income probably hasn’t kept up with that inflation in home prices. So rather than buying, most people are choosing to keep their current homes and their sweet heart interest rate.

People moving from in from out of the area

Transaction volume is down in part because of the mobility challenges described above for move up buyers. But the market has dropped as much as people would think considering interest rates. That is largely because we still have a very desirable place to live. People are still moving in because we have a very robust job market, we don’t have income tax and our climate is better than many. We also have a housing shortage and because of that rents are very high.