Washington State is iconic for many reasons. It is the home of the Space Needle, Starbucks, Microsoft and grunge music. It is a place known for green spaces, outdoor adventures despite the rainy weather and access to some of the most beautiful naturescapes in Puget Sound, the Cascade Mountain Range and Mount Ranier, which is still an active volcano. The State of Washington is one of wealthiest and most socially progressive places in the U.S. with a wealth of amenities that contribute to its appeal as one of the best places to put down roots
Washington State Economy at a Glance
The strength of the state’s economy lies in its diverse economic base, which should appeal to those seeking investment opportunities in Washington. A number of prominent big corporations have headquarters here, contributing to a strong and stable job market. The number of employees cited is based on overall payroll¹:
- Amazon – 600,000 employees
- Microsoft – about 124,000 employees
- Boeing – 150,500 employees
- Starbucks – 254,000 employees
- Costco Wholesale – 172,000 employees
- Providence Health & Services – 120,000 employees
- Barrett Business Services – 115,746 employees
- Nordstrom – 78,000 employees
- T-Mobile – 50,000 employees
- University of Washington – 25,790 employees
- Fortive – 24,000 employees
- PACCAR – 23,000 employees
- Expedia Group – 20,075 employees
- Savers – 20,000 employees
- Alaska Airlines – 19,214 employees
In 2016, the state’s economy grew by 3.7 percent. Compared to the national growth rate for the same period, Washington’s economy grew 2.5 times faster than the rest of the country. Not surprisingly, the state tops the list when it comes to growth of gross domestic product, the number of high-tech jobs and the number of STEM workers.² It is not surprising that the state attracts and retains a skilled workforce for the following reasons:
- Availability of high-wage jobs with some of the best benefit packages.
- Wages are higher than the national average.
- Housing is more affordable compared to home prices in Silicon Valley.
Washington is one of only seven states that does not impose a state income tax on residents. The state does not collect corporate income tax. The base sales tax rate is 6.5 percent, but counties are allowed to add on to the base tax rate as they see fit. The tax rates may be anywhere from 8 to 10 percent, depending on the county.³
Overview of the Washington Real Estate Market
Data from the Washington Center for Real Estate Research shows that inventory of available homes for sale improved by 17.6 percent on a year-over-year basis, comparing 2017 and 2018 numbers. Median home price rose by 6.1 percent to $385,000 for a typical Washington house. The housing market is expected to remain strong with prices appreciating between 6.5 percent to 9.5 percent in some of the biggest metropolitan statistical areas in Washington.⁴
Investment Opportunities abound in the Evergreen State
Investment opportunities abound in the Evergreen State, but it is important to note the regional diversity that may make certain areas the better investment niche for some buying Washington real estate. It is easy to see what draws people to the large metropolitan areas and some of the more laid-back communities may have just as much potential upside when it comes to real estate investments.
King County
King County is the state’s most populous, which is not surprising because it includes the city of Seattle. Seattle is Washington’s biggest city. King County is part of the Seattle-Tacoma-Bellevue MSA. This county leads the state when it comes to job opportunities because several of the state’s biggest employers have their corporate headquarters in Seattle, Bellevue and Issaquah.
Home prices in Seattle and King County had risen sharply as the market heated up in 2017 and 2018. As a result, many homebuyers were locked out of the rising market. However, data from the Northwest Multiple Listing Service shows a significant drop in home prices in 2019. Prices fell 5.4 percent to reach a median price of $784,925 compared to May 2018. The slump in prices appears to be a pattern echoed in neighborhoods known for higher-priced homes, including the cities of Ballard and Belleview.
King County is expected to continue drawing some of the top tech minds as its tech sector grows. Among millennials, it has earned a reputation as the place to be for rising professionals given the easy access to points of interest such as the Space Needle, Chihuly Garden of Glass and various museums, including the Museum of Pop Culture.
Spokane County
The city of Spokane is the largest in this county, and it is also the county seat. It is second most populous after Seattle, and it is part of the Spokane-Spokane Valley MSA. Spokane has become one of Washington’s housing hot spots because home prices are still at affordable levels compared to the rest of the state and the U.S. The median price is $199,900 with home values expected to appreciate by 10 percent.⁵
Spokane has a lot to offer to nature enthusiasts. Spokane River winds through it, and residents enjoy convenient access to the summit of Mount Spokane, which is just under 6,000 feet. The Turnbull National Wildlife Refuge is a protected habitat for waterfowl and other wildlife.
Snohomish County
Snohomish County ranks third most populous in Washington. The largest city is Everett, which is also the county seat. This county is part of the Seattle-Tacoma-Belleview MSA. With interest rates dropping, activity in Snohomish County’s real estate market has picked up with the average sale price reaching $518,141, which is a record for the area. Average days on the market improved to 24 days, which means most transactions are closed in under 30 days. Inventory of available homes for sale stands at 1.7 months, which is below the ideal level.⁶
Reasons for Buying Washington Real Estate
Solid investment opportunities in Washington require some research because this is a very competitive market. It is one of the hottest housing markets in the nation due to a strong local economy, steady job growth, availability of affordable housing compared to other technology hubs in the U.S. and a host of amenities that appeal to the younger generation. The state’s economy is expected to remain stable due to a diverse tax base that covers manufacturing, technology, health care, education and business services. The rise in home prices may have leveled off, but the housing market is expected to remain strong for the foreseeable future in Washington.
Auction.com is the largest and most efficient online marketplace for bank-owned and foreclosures priced at a discount. There are at least 700 listings to choose from for the Washington area. Browse the listings to find properties that match your investment goals. From there, it takes only a few more steps to get into Washington’s hot housing market. Start your research for Washington real estate properties here.
Sources:
¹ Naples Real Estate Market Trends And Forecasts 2019
www.noradarealestate.com/blog/naples-real-estate-market
² Washington Real Estate Investing: Why Invest in Washington?
³ Retail Sales Tax
⁴ This Real Estate Market Will See Almost 12% in Appreciation
Eric Fox-Eric Fox – https://www.housingwire.com/blogs/1-rewired/post/47246-this-washington-state-msa-will-see-the-most-real-estate-appreciation
⁵ Real Estate Investing Blog
http://www.noradarealestate.com/blog/best-places-to-invest-in-real-estate/#5_Spokane_Washington
⁶ Snohomish County Real Estate Market Report – February 2019
Makalie D – https://www.primelistingsgroup.com/blog/snohomish-county-real-estate-market-report-february-2019/
