All-cash home buyers have been a force in the Capitol Hill and Central District real estate markets, too, but prices are now so inflated, even these flush buyers have begun to back off.
If you’ve been looking to buy a home or condo recently, you know the spirit crushing force all-cash buyers bring to the market. Well heeled investors that swoop up homes from financed buyers by promising sellers quick and easy transactions. Over the past decade all-cash transactions have represented an increasingly large share of home sales in Seattle.
Since 2008 all-cash buyers have doubled in Seattle to make up 20% of all sales, according to analysts at Polaris Pacific (PDF). Cash buyers are “generally from opportunistic investors and not from trade-up buyers or first-time buyers,” said the report.
Windemere real estate agent George Beasly focuses on Capitol Hill properties and said nearly a third of this clients today are all-cash buyers looking for reliable investments. “What else are you going to do with your money?” he said.
Beasly, who runs the site residentialcapitolhill.com, said he’s seen a big uptick in the number of all-cash buyers in recent years, particularly among wealthy foreign buyers who are are often looking to park money in a safer economy. Beasly said international buyers will frequently move their children into homes while they attend college.
However, in 2014 there’s been a slight dip in all-cash and “absentee buyers” with increasingly fewer “steals” to be found on the market. The cooling off of investor buyers could mean less competition for families and first time buyers, but prices on Capitol Hill are still well out of reach for many currently living in the neighborhood.
Last year CHS wrote about Capitol Hill’s competitive, cash-is-king condo market as new condo construction has slowed to a trickle amid Capitol Hill’s apartment boom. Overall housing prices also continue to outpace incomes in central Seattle.
Accoring to Trulia, the median home price in Central District/Capitol Hill’s 98122 area code was $492,000 — well out of reach for many in the area, where the median household income in 2013 was $47,405. On that income, the most expensive “affordable” house (30% of income) would be around $294,500.
The cost of living in the area, of course, isn’t any better for renters. Last month CHS wrote about rents that continue to soar on Capitol Hill, as average rents recently reached $1,557 a month, up $162 from the same time last year. Meanwhile the City Council has delayed the roll-out of its affordable housing plan, which is now expected to go before the council early next year.
Above: The old Comet’s ceiling — also all-cash