Transformational changes are occurring all around us, including business, technology and culture. Here are some examples of what to expect in 2018.
1. Changing attitudes. Seattle’s new mayor will be a woman. Only the second woman mayor since Bertha Knight Landes was elected in 1895. With the new mayor comes a shift in focus toward affordability, inclusivity, and economic justice.
2. Managing growth. Seattle’s No. 1-ranked economy has fueled a tidal wave of people moving here. Seattle’s population is estimated at 715,000 residents in 2017, pushing Seattle to the 18th largest city in the U.S.. Before the end of 2017, Seattle may hit 725,000 residents, which was the projected population estimate for 2035.
3. Traffic congestion and housing shortage. These issues will continue to dominate in 2018. Seattle leads the nation in increasing cost of rents, and Seattle has the most extreme shortage of listings available ‘for sale’. Traffic congestion will continue to worsen in 2018. A study done by Inrix ranks Seattle as having the 10th worst commute in the country, the 23rd in the world.
4. Raze and redevelop strategy continues in 2018. Density at almost any cost is Seattle’s current housing policy. Affordability is the casualty. At least 10,000 new apartments will open in 2017 and another 12,000 apartments will open in 2018. As a result, rental rate increases have slowed from 9.7 percent in 2016 to 3.96 percent increase in 2017, according to rentjungle.com.
5. Homelessness crisis persists in 2018. Homelessness is in the headlines every day, and will continue to be a challenge for Seattle’s leaders in 2018. At present, Seattle has the 3rd largest homeless population in the U.S., behind only Los Angeles and New York. Seattle also has more than 100 non-profit agencies with a focus on housing and homelessness, but there is no coordination of these services, according to a report prepared by the city’s consultant. “People are excited about doing something about homelessness, but not willing to make the housing-market changes,” according to Rachel Fyall, a University of Washington assistant professor in the Evans School of Public Policy and Governance. “That includes building higher density housing and smaller homes that cost less. “Without improving the affordability of housing more generally, it’s going to be hard to have an impact,” Fyall said.
6. Home price growth slows in 2018. The Northwest Multiple Listing Service reports that sales of single-family homes valued at more than a million dollars jumped 52 percent in the first eight months of 2017. The Federal Reserve is hinting at a rate hike in December, and that usually acts as a foot on the brake of rising home prices. Supply and demand, interest rates, and economic headwinds in 2018 should act to slow the rate of home price growth in 2018.
7. Shortage of homes persists in 2018. Seattle has been the hottest housing market in the nation for most of 2017. Supply demand will continue to impact housing in Seattle. The shortage of listings is a crisis, according to the National Association of Realtors. The supply of homes for sale in July 2017 was 9 percent lower than one year earlier. “The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace,” said Lawrence Yun, chief economist for the Realtors. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves.
8. Generation Z competes with Millennials for housing. Millennials are finally moving out of mom & dad’s basement. Nationwide, household size is now 2.53 persons per household, down from 2.57 persons in 2006. Generation Y (aka, Millennials) born 1977 to 1995 is being joined by Generation Z, those born after 1996, who are entering the housing market for the first time. Most Generation Z are seeking apartments, while the Millennial generation is finally making an impact on housing purchases. Millennials now make up 66 percent of all first-time home buyers, and they are 34 percent of buyers overall.
9. Pets impact housing decisions. A major factor driving millennials to purchase a home is their pets. One-third of millennials report their pet influenced their home-buying decision. Some 66 percent wanted more living space, a more typical reason for buying a home, and building equity came in just ahead of the dog rationale. In the hierarchy of things, pets come first, kids follow shortly thereafter. Both kids and pets need a yard.
10. Hottest trend: Smart home automation. Increasingly, consumers want connectivity and automation. New Samsung refrigerators are equipped with wi-fi connectivity and cameras inside so you can see if you need milk while you’re standing in grocery dairy aisle. The most-popular home automation feature is security. Several security systems are available which allow you to see who just rang your doorbell while you’re at work, or on a beach. Smart home technology is in demand. Look for more expansion of automation with wearable and integrated technology which controls heating, lighting, media, and other household functions.
Ray Akers is a licensed Realtor for Akers & Cargill Properties in Seattle. Send your questions to ray@Akerscargill.com or call 206-722-4444.