Real estate site Redfin tweeted a potentially damning chart this morning: Seattle is blowing us away in sales of new construction.
We’ve heard several times this year that Seattle is supposedly "the next San Francisco." Our partners at Curbed Seattle note that rents are on a sinister rise there already, and tiny studios are commanding $1,000/month. As our market is finally showing signs of cooling, theirs is coming is coming to a positive boil.
The seat of King County has a lot in common with San Francisco in general: tightly confined on a peninsula of sorts, serviced by two major bridges, surrounded by a metro area of more than 3 million people, and feeling anxiety about the ingress of new residents.
New construction home sales: Seattle vs. San Francisco pic.twitter.com/NjTnEO2Kau— Redfin (@Redfin) July 6, 2016
Meanwhile, that city is growing at a positively freakish rate, with nearly 80,000 new residents in only five years. The San Francisco Planning Department is always projecting a local growth rate of 10,000/year, and we’re having trouble keeping up even with that ceiling.
But Seattle’s approach to housing has been night and day compared to San Francisco: They set a goal of over 2,400 new units every year for nearly 20 years, starting way back in 2005.
We’ve been building at comparable rates, but only for the last few years. As recently as 2012, we produced only a meager 1,279 new units, one per every 10.5 people who relocated to the city that year. They’re blowing us out of the water now not only because of the huge influx of new people, but because there are more places to put them.
The comparison is not completely fair, of course. Seattle is a much bigger city geographically (83.3 square miles, which is by no means enormous but beats our 49 square miles), and much less dense for the time being.
Their housing sock is almost perfectly split between owners and renters, in contrast with San Francisco, which has always been a renter’s city. And their vacancy rate is comparably enormous, with over eight percent of the city’s 308,516 units empty. San Francisco’s estimated vacancy rate is a shockingly low 0.3 percent.
Still, however, it barely cracks the top ten among U.S. cities in terms of things like rent cost and density per square mile. Seattle’s trend lines are all pointing up, with prices leaping over last year’s and their population exploding.
Here in San Francisco, the many years of madhouse growth appear to be leveling off in 2016. Our status as the highest demand market could well be up for grabs.
Of course, few locals would be heartbroken by this turn, and people in the Emerald City probably aren’t looking forward to being king of the heap. But, unlike real estate development in San Francisco, community feedback doesn’t count for much in market trends.
- Redfin chart [Twitter]
- Seattle Rent Reports [Curbed Seattle]
- Curbed Comparisons, Seattle [Curbed Seattle]
- SF Second Most Expensive [Curbed SF]
- Seattle Metro Area [Wikipedia]
- Seattle Quick Facts [US Census]
- Seattle Now Fourth Among Growth [Seattle Times]
- Seattle Population Demographics [City of Seattle]
- SF Out-Built LA [Curbed SF]
- Prices Flatten, Shortages Loom [Curbed SF]