Property values in Seattle area reach ‘unprecedented’ level | Washington
(The Center Square) – COVID-19, inflation and other factors have led to property values in parts of Seattle to increase 19.42% in the past year.
King County Assessor John Wilson and his office have gathered information to come up with these statistics. The parts of Seattle that are seeing double digit spikes are in what Wilson calls the “silicon forest,” where big tech companies are driving the markets up.
“The majority of the neighborhoods we’re seeing the significant double digit spikes in right now are those that are in proximity or literally right in the lap of the sort of silicon forest that we have here [in Seattle],” Wilson said in an interview with The Center Square. “The influence of Microsoft, Google and Amazon seems to all be kind of converging and driving these markets up.”
Wilson also cited the pandemic and inflation for reasons why property values are spiking. The highest spike in property values he’s witnessed is a 52.3% increase in the north Sammamish Plateau.
“These are unprecedented numbers,” Wilson said in reference to the property value spikes. “We’ve had periodic value spikes before, but nothing like this.”
Wilson notes that Washington operates in a budget-based system. This means that when a homeowner’s property value goes up, it doesn’t necessarily mean their property taxes go up much as well. However, Wilson predicts proportional shifts in areas that are experiencing the most dramatic increases in their property values.
As property taxes go up, homeowners are now facing a new dilemma with the housing market.
“[Homeowners] might now be thinking about selling, but the problems are: where do you go? And with interest rates starting to climb up, what can you afford?” Wilson said.
Junior Torres, a real estate agent in King County, says that the pandemic has caused the housing market to go up in value, but believes the lack of land available in Seattle has also attributed to the spike. Torres has seen people drop out of the housing market because property values are too high.
“We start seeing a lot of people dropping because the changing interest rate is no longer feasible for them to be buying a $600,000-$700,000 home,” Torres told The Center Square. “People are racing to see if they can get something before the prices continue to go up.”
Torres expects the Seattle housing market to look much like those in cities like Manhattan and San Francisco where there are a large number of lifetime renters.
Some Seattle residents have moved out of the city due to rent prices increasing in the city as well.
Moshe Pytel (32) moved from the southside of Seattle to a two-bedroom condo in Des Moines, WA, which is about 30 minutes away. Pytel says buying a condo far from the city is ending up being cheaper for him than renting in Seattle.
“My overall payment [a year] is actually less than what I would be paying for rent in Seattle,” Pytel said. “I’m paying probably $600 to $700 less than what most people are paying for a one-bedroom, so the property taxes built into that are fine.”
Torres is concerned for older residents of Seattle. He said that the retired individuals that are in the $65,000-$100,000 income bracket cannot qualify for the Senior Exempt Tax Rate, which is limited at $58,423 in King County, according to the county’s website.
“So if [a senior citizen] makes $60,000 in income from social security or pension and they are getting a tax bill of $20,000, that leaves them $40,000 to live on,” Torres said. “So what do these people have to do? They have to sell their $2 million home…and they have to downsize.”
Torres said he had one client in Southeast King County make less than $60,000 but still owe around $16,000 in taxes because she failed to meet the Senior Exempt Tax Rate.
As more homeowners begin to struggle with growing property tax rates within King County, officials are still looking to taxpayers to help fund programs.
On May 19, King County Executive Dow Constantine proposed a measure for the upcoming November ballot that would have homeowners pay about $22 more in property taxes a year for conservation efforts within the city. If passed by the county council, voters would have to decide to tack on more to the growing property taxes.