In our last post, we discussed recent price changes in the rental markets of the Greater Seattle area. As we saw, many markets in the Seattle region are experiencing rent increases, and these increases are having a big impact on the wider society. Many would-be renters in the Seattle area may end up leaving town altogether and finding accommodations elsewhere. On a related note, the expansion of Amazon to Bellevue may ultimately lead to increased home prices. While this may not sound like a stunning observation, this fact may have some very important ramifications, especially considering the current state of Bellevue home prices as of August, 2019. If Amazon’s presence pushes prices up too far, we may see many would-be buyers look elsewhere as the Bellevue market becomes prohibitively expensive. Let’s look at some numbers and then try to get a sense of where things might be headed.
Recent Zillow Numbers on Bellevue, WA
According to Zillow, the current median home value in Bellevue is $907,400 (as of June 2019). That is considerably higher than the current median in Seattle proper, which is $714,600 (also as of June 2019). To give this value a bit more context, the current median home value in San Francisco, CA is about $1.362 million. If Bellevue prices increase, they won’t be too far off from the most expensive real estate market in the country! For further context, median home values in Manhattan are about $1.2 million (as of June 2019).
Interestingly enough, this value we have for Bellevue actually represents a decrease of approximately 2.9% from where it was last year (June 2018). And what’s more, Zillow predicts that median home values will continue to fall over the course of the next year. Zillow estimates a drop of 3% in median home values by next June. This raises an important question, however: does this Zillow prediction properly account for the increasing presence of Amazon on the east side? There may be plenty of new Bellevue-based employees who don’t mind commuting from outside of the immediate Bellevue area. But it seems very, very plausible that many new Bellevue-based employees will look to purchase in Bellevue, and this new increase in demand could easily lead to a rise in prices. This was actually speculated by Redfin back in March of this year.
Looking Ahead to the Future
Unfortunately, we don’t have a crystal ball through which we can see what will happen to the buyer’s market in Bellevue in the future. But given Bellevue’s expansion, along with other corporate expansion in Bellevue, we could see Zillow’s current predictions failing to hit the mark during the next 12 month period. In fact, Amazon’s move isn’t set to be complete until around 2023 (or a bit later), and so we may see prices gradually move up and up over the next several years. If this happens, Bellevue may end up consolidating its reputation as an upscale tech-hub filled with well-paid, well educated residents. And it may end up rivaling some of the most pricy real estate markets in the country. Facebook and Google have also increased their presence in Bellevue recently, and so this could further drive prices upward if a sizable portion of Facebook and Google employees enter the market on the east side. As things progress and Amazon adds more and more employees in its Bellevue office space, we will have to check back and see what trajectory the market takes. The fact that the east side is adding many new jobs is obviously nothing to complain about. But if this means that Bellevue becomes “off limits” to a great many Washingtonians, it raises plenty of potentially difficult questions.
Image credit: sporst