|
Although the
homeownership rate has remained fairly stable over the past decade, Seattle has
experienced a dramatic increase in home prices. This increase in home prices
has caused a shift in who can afford a home in Seattle. In 1990, a family of
four earning 80% of the area median income could afford to buy 18.4% of all
homes in Seattle. In 2000, that same family of four could only afford 8.8% of
Seattle’s home sales. The lack of affordability has continued to increase and
has become an even bigger problem today. Today, a family of three living in
Seattle would need to earn 120% or more of the area median income in order to
afford a median-priced home.
Seattle Housing Values and Affordability
1990
2000 % Change
Median sales price
for
single family
homes $137,900
$270,000 95.8%
Median income
(family 4) $41,500 $66,000
59.0%
Percentage of home
sales 18.4% 8.8%
-52.2%
Affordable at 80%
AMI
Source: Seattle Housing Levy Renewal;
Homeownership case statement.
As you can see from
the table, the median sales price for homes has increased dramatically. The
shortfall in the number of housing units built compared to the increase in
population and job creation has limited new housing and driven Seattle housing
costs very high. Condos are a key element in creating more housing units in
small areas, therefore leading to more affordable housing. Generally, the size
and ownership process of condominiums causes them to be more affordable than
single-family homes. As opposed to a house, when you purchase a condo, you are
just purchasing the actual unit and not the land it sits. With land so scarce
and expensive around most metropolitan areas, people are turning to condominium
development as the most practical way to own a home and utilize real estate.
Condominiums can be
a cheaper alternative to a single-family house, but due to their tremendous
increase in value over the past few years, this has begun to change. On a
national basis, condominiums have appreciated about twice as much has
single-family homes, therefore closing the price gap between condos and homes.
There has been eight consecutive years of
condominium growth in Seattle. The value of Seattle condos has outpaced the
value of homes. The median price of condos in Seattle is $175,000. The latest
trend in condo ownership is the downsizing by the “empty nesters”. They are
moving from the suburbs into more urban areas for the social atmosphere and the
livable size of condominiums for two people. In Seattle, 42% of condo owners
are 45 years old or older.
Source: Northwest Cable News
Story: 5/23/04. |
