We’ve been reporting here about Seattle’s sizzling housing market for a while these recent months. It seems that now, for the first time, Seattle’s red hot housing market is so hot that it’s cheaper to rent than it is to own there.
Zillow’s new study gives us the data…nationwide, a typical renter can buy a home that is “…50% more expensive than the median sales price and keep the monthly housing costs the same…Seattle is the exception.” Median monthly rent nationwide is approximately $2,550. A typical renter could buy a house valued at $519,310. (taking into account a 30-year mortgage loan package at prevailing interest rates, taxes, insurance, maintenance costs, etc.) and make it work. In Seattle, such homes priced at $519,310. are few and far between…only one quarter of the homes listed on the housing market there are within this price point.
Seattle’s median home value price point is instead $638.000. Do the math and you’ll figure out that Seattle’s skyrocketing home values are outpacing its incredibly high rental prices. An earlier Zillow study told us that the biggest obstacle to homeownership was the ability to save up enough money for a downpayment however, today, in Seattle, saving for a downpayment pales in comparison to the 10% or even the 3% of a typical Seattle home price!
With these home prices, it’s no wonder that nearly one half of Seattle’s residents are renters. More than one half of all housing units in Seattle are rental units. Very soon now, Seattle will likely become a renter majority city.
To make sure that the voices of Seattle’s exploding rental demographic are heard, the city has created a Renter’s Commission. Comprised of 15 volunteers (53% Caucasian, 29% African American, 27% Latino) who rent throughout the city, Commission members will address community issues that very much affect their lives…issues such as public safety, land use, parks, transportation, tenants’ rights issues, education, etc. Their voices will then be included into Seattle’s Mayoral Housing Affordability and Livability Agenda.
Such a model that includes the voices of residents renting in Seattle may be one that other cities around the country may want to adapt if/when cities become more renter-centric due to escalating home prices.