Real Estate
Hot Hot Hot
The Seattle area’s real estate hot spots are cities and neighborhoods that offer easy access to employment hubs and the city core. While the rest of the country pales over dropping real estate prices, Seattle remains solid and booming

Call San Francisco and complain about home prices in the Seattle area, and the next thing you may hear is a dial tone. Sure, gone are the days (for now) when local sellers sat back and waited for bidding wars to begin, but compared to most of the rest of the country, Seattle’s real estate market is hot.

With a mere 6.3 percent decline in home prices from May 2007 to May 2008, the Seattle metropolitan area hasn’t gone the way of Las Vegas and Miami, where home prices in May were down nearly 28 percent from 2007, or West Coast peers San Diego and San Francisco, where home prices dropped about 23 percent, according to Standard & Poor’s Case-Shiller Home Price Indices. In fact, between March and April of this year, home prices in Seattle actually rose nearly 1 percent.

Slice of the Sky

While most up-and-coming Seattle condos include amenities such as concierge services, secure lobbies, fitness centers, rooftop gardens, entertaining areas and guest suites, what makes each one unique is its different viewpoint on Seattle’s natural and manmade beauty.  

Named for the floor-to-ceiling “gallery” windows that frame Elliott Bay or the Space Needle in many of the homes, the Gallery condominium helps define a new Belltown look. Set back from the typical zero lot line, the building provides space for tree-lined sidewalks, creating a boulevard feel. Units include studios, flats with open floor plans, townhomes with private entrances, lofts and two-story penthouses and are priced from the mid-$300,000s to $1.5 million. Residents move in this month.

Homeowners at South Lake Union’s Enso will enjoy views of downtown skyscrapers, the Olympic Mountains, the Space Needle and Lake Union. Located at Westlake and Denny, Enso is being built to LEED Gold standards. Features include sustainable wood floors, carpets made from postproduction yarn, cabinetry that doesn’t off-gas and artisan-made cast-concrete countertops. Units range from 700 square feet to more than 2,200-square-foot two-story penthouses, and from $400,000 to $1 million.  Expected completion is spring 2009.   —Eric Livingston
Which means now is the time to buy in Seattle, according to Mike Skahen, owner and broker at Lake & Co. Real Estate. Any buyer applying national trend data to the Seattle market is missing an opportunity, he says.

“If buyers were smart, they’d ignore [national trends]; they’d go negotiate with sellers, who are getting extremely desperate in some cases, and take advantage of the 8–10 percent we’ve dropped from the peak last July,” Skahen says. He recommends negotiating with sellers who’ve had a house on the market for a while and who may be willing to give buyers even more concessions—though Skahen doesn’t expect to see Puget Sound home prices get much lower than they are right now.

“The prices have already dropped,” he explains. “They actually went up and peaked last July, and then they dropped and leveled out in December—to approximately what they were in December 2006—and we’ve been relatively flat since then.”

Desirable Locations
If you want to take advantage of the recent buyer’s market, then you might want to know which King County neighborhoods are attracting home buyers. Living near employment hubs such as downtown Seattle or Bellevue or near Microsoft has always been appealing for the reduced commute times they offer, but these days it’s less about commute time and more about gas money.

“In the last six months, gas has become so expensive that people are really having to consider whether they can drive from Bothell to Seattle,” Lake agent Skahen says. “It all comes down to jobs, what those jobs pay, and how close you are to those jobs. And then the desirability of the neighborhood comes in.”

While the promise of more home for less money once lured buyers away from Seattle, nearby cities such as Bothell, Shoreline and even Edmonds—which Skahen refers to as the “Sausalito of Seattle”—have cooled considerably. In their stead are cities and neighborhoods that offer easier access to employment hubs and the city core.

Real estate search engine Trulia lists the most popular parts of King County (based on user searches) as Kirkland, Bellevue and Redmond—areas near major employment centers. Mercer Island is another hot Eastside neighborhood, says Wendy Lister, vice president and associate broker at Coldwell Banker Bain in Bellevue. Here, the 12 new sales in June ranged from a low of $849,000 to a high of $12.5 million. Closing prices on 35 Mercer Island homes went as high as $5 million in April and May. “I would say Mercer Island is doing a very respectable business,” she says.

For those who can afford to buy no matter what the state of the economy, the market couldn’t be much better, says Lister, who holds that the best real estate hot spots are less about location and more about desirability. High-end luxury homes are still very, very hot, she asserts, mentioning a $13.3 million home sale in Seattle, the $12.5 million pending sale on Mercer Island and two sales in West Bellevue—one listed at $10 million, another at $12.5 million.

Heating Up
In Seattle, it is some of the close-in neighborhoods that are seeing the most action. And the city’s “close-in” definition seems to be expanding to areas outside of the traditional neighborhoods such as Belltown, Queen Anne and Wallingford. 

“In my opinion, Ballard and Capitol Hill are really hot right now,” says Keller Williams Realtor Matt Warmack. “There are new places being built, there are new restaurants, there’s a new vibe.”

Not only does Warmack currently have more clients looking in Capitol Hill and Ballard than he did a year ago, he’s also seeing buyers there get more for their money. It helps that the neighborhoods offer more inventory. In fact, at press time, real estate Web sites Zillow and Trulia listed 142 and 157 houses, respectively, for sale in the “Broadway” area, which stretches from Broadway to Madrona on their maps.

Warmack may be right about Capitol Hill’s new popularity. A search of the Multiple Listing System showed that in May 2007, 44 houses sold in Queen Anne, while in May 2008, 23 homes sold; by contrast, 47 homes sold in the Capitol Hill and Madrona area in May 2007, but 52 sold in May 2008.

“I think Madrona is a great neighborhood that is really up-and-coming,” says Anne Willoughby Nelson, an agent with Madison House, Ltd.–Christie’s Great Estates. “I think it’s on the verge of real growth.” That’s because it offers accessibility to downtown, great little shops and an opportunity for buyers to get in at a more affordable price point than in many other parts of the city, she explains.

Nelson goes on to name other Seattle neighborhoods experiencing a resurgence, including Ballard. Somewhat tongue-in-cheek, she recommends that buyers follow Top Pot Coffee and Doughnuts (with outposts in Belltown, Wedgwood, Capitol Hill and Queen Anne) and Cafe Verité (Ballard, Madrona and West Seattle) to identify a hip new neighborhood. Coincidentally, all of those locations make it onto her list of hot ’hoods.

Perhaps the best way to look at the local real estate market is from a glass-half-full perspective. Buyers can rejoice knowing that it is a buyer’s market across the country, and sellers can relax knowing that Seattle is one of the country’s stronger real estate markets. Just don’t call San Francisco and gloat. 

Julie H. Case is a Seattle-based freelancer who writes regularly about science and technology at the intersection of business; travel and adventure; winter sports; and food and wine.