In a word: everything! The number of building cranes on the 48 currently active construction sites is the obvious indicator of the Emerald City emerging as an 18 hour metropolis, a city that almost never sleeps, as described in a cover story by Editor Rob Smith in the current edition of the Puget Sound Business Journal.
However underlying fundamentals are the forces behind the the enormous surge in growth and development, making Seattle a world class investment opportunity. Downtown Seattle tops the lists among the most attractive investment markets in the U.S. and is the fastest growing large city in the nation. Realogic's Sotheby's (RSIR) was among the hundreds of stakeholders attending the sold out Downtown Seattle Association’s (“DSA”) annual State of Downtown event at the Westin Hotel on February 4th.
Event highlights included:
- More than 10,000 new jobs were created since 2010
- With more than 9,300 households per square mile, Downtown is the growing center of density in Seattle
- 20 new residential buildings added 3,600 units to the Downtown inventory in 2015
- In the past six years 72 residential buildings have been delivered totaling 11,416 units
- Another two dozen residential projects are either under construction or planned (mostly apartments)
- With 245,774 estimated jobs in 2015, Downtown is home to 49 percent of the Seattle workforce
- Downtown Seattle has a 3 percent retail vacancy rate, the lowest in 10 years
- There are currently 2,663 street-level service business storefronts in Downtown Seattle
The complete report is linked below, with comprehensive insights into emerging trends in business, cultural, retail and public-private ventures. http://bit.ly/1T3W116
More people are calling downtown "home", including kids, leading to the development of a diversity of housing options and corresponding community based amenities. One in 10 Seattleites now lives in downtown. Downtown has also seen a 30% increase in spending on the arts, sports entertainment and food/beverage over a 5 year period.
What does this mean for real estate? Classic high demand and low inventory led to a year over year 30% appreciation of real estate values in the downtown neighborhoods. Although developers have shown a preference for building apartments in the past few years, that is likely to shift in 2016 with a new cycle of high rise condominiums. In addition to the 12 distinct urban areas formally recognized by the DSA, a new area for planned transformative projects is already be in the works– a triangular pocket on the northeast corner of downtown bound by I-5, John Street, Olive Way and 9th Avenue, referred to by Dean Jones, owner and CEO of Realogics Sothebys as the “East Village.” According to Jones, “New communities will be created where we find the convergence of available land, zoning and sustained demand for housing,” said Jones. “In the matter of just five years we will be astounded at how quickly these surface parking lots and transitional commercial buildings evolve into a thriving 24-hour metropolis.” More on RSIR and evaluation of downtown residential development at http://bit.ly/20IoY8X
A major factor in the shift of developers to building downtown condos and the growing propensity of home ownership is that Seattle area benefits from a short “breakeven horizon”, vis-a-vis rent vs. buy, due to low interest rates, high rents and rising home prices. Residential growth downtown Seattle is outpacing the city as a whole as well as the entire region.