A single-family style home neighboring multifamily housing on Capitol Hill (Image: City of Seattle)
One thing is back to normal coming out of the pandemic. Seattle’s property values are on the rise again.
The King County Assessor’s office says residential property values rose in “most Seattle neighborhoods” as it establishes valuations for the next year and mails out notices to homeowners.
County assessor John Wilson says median residential property values “rose by 6.5% in Queen Anne and Capitol Hill, and by 6.2% in Leschi/Madison Park” while values fell by 2.5% in Seward Park.
The office says “preliminary indications” show most residential areas of King County will increase more than 10% on average in the new assessment. “Commercial properties are more mixed depending on property type,” according to the announcement.
“After dramatic fluctuations in the residential market during the COVID years, values have returned to a steady level of increase,” Wilson said. “The volatility now is in the commercial sector and among condominiums.”
Las year, the assessor said 2023 property values continued to be affected by lingering impacts of the COVID 19 pandemic. After reaching all-time highs in 2022, residential property values were seen as correcting downwards throughout the county. Meanwhile, values of commercial office buildings fell by 15% to 20%, “reflecting the impact of a transition to less in office work activity.”
This year’s assessment shows that the residential trends prior the pandemic appear to have gotten back on track while commercial real estate around Seattle remains.
Meanwhile, the office is reminding property owners that higher assessed values are only part of what will be higher tax bills in the future. With Washington one of the remaining states without an income tax, many necessary resources and projects are funded by local levies. In the latest example, this fall, Seattle voters will decide on the city’s proposed $1.55B transportation levy.
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It’s funny to me how most people fully understand how cars almost always begin depreciating in value immediately after purchase, except when there’s a shortage in supply (like during the pandemic when production snags caused used car prices to shoot through the roof).
If there is no shortage in the market however, the car loses value as a given. We all know cars aren’t naturally getting cleaner and nicer as they age, why would they appreciate anyway? The price inflation throughout the economy that we’ve seen in the US has been a series of decisions by all major corporations to raise prices internally, with that trickling down through all other markets — it’s not some naturally occurring phenomenon innate to the items being sold, like a car or a house. In fact, the same value depreciation that affects cars could easily occur within the housing market in theory, if only there was an already existing and adequate supply.
But if both are commodities, how does the price of housing almost always increase despite age, while the price of cars almost always decreases with age? Well, we don’t traditionally live in our cars. Our requirement for shelter makes the investment in a house a lot less “flexible” of a commodity to be bought, in terms of our physiological need for it (similar to healthcare). Can’t just not have it. Gotta have shelter, no matter what. Transport is important, too, but most of us are lucky enough to have built-in bipedal transport via our legs–none of us are lucky enough to have built in shelter from the elements. If we instead all lived in our cars and didn’t have ‘built’ neighborhoods, you better believe the price of cars would continue to rise in perpetuity…especially if there weren’t enough cars to go around. Who knows, one day those cars might even appreciate so much, they could be sold on a market that prices out half the population. How dystopian!
Most people don’t seem to understand that housing has very little inherent value, except that which we ascribe to it through the implicit understanding that our insufficient supply drives up demand and thus the price…because without it, you die. Food for thought for those value-obsessed homeowners out there. (For the record, any Seattle landlords setting their prices based on RealPage software algorithms are 100% contributing to our crisis and will have their day in court.)
Remind me to pay you for this free community college lecture. Sheesh. Quite pedantic, don’t you think? It’s Saturday night, relax a little
What you are describing is the outline to the 1979 film Americathon staring John Ritter and Harvey Norman.
I’m not sure I’ve ever read such a total load…. Comparing cars and houses is just a lousy analogy all over in the first place and much of what you are saying is just wrong…
No, the price of housing does not “always increase”…. My parent’s house (not here in Seattle) that they owned for at least 20 years sold for pretty much the same amount they’d purchased it for – so taking into account inflation, it’s price actually decreased. Just because **you** have never experienced real estate losing value doesn’t mean it doesn’t happen.. When a place is no longer flourishing – aka Detroit, that happens, when the economy is rocky aka the housing bubble, that happens..
And cars that people live in – AKA motorhomes, definitely do not increase in value… they pretty much always depreciate… The price of a home is about much more than just the house.. it’s about the neighborhood, the economy, the surrounding job market.. many things that are tied to the place, a car that works the way it supposed to no matter where you take it…
Do you own or rent?
If you own, then you get an annual tax assessment that shows the proportion of your taxes that go to the land and the portion that go to the structure. The rates are variable but structures tend to decrease in value and land increases in value, just as your post tried to equate with vehicles. The place you park your car goes up in value, while your car goes down in value.
So based on your comment, I would think that you do not get a tax assessment each year. Therefore you rent. No shame. But who are you preaching to? And what was the sermon?
Besides that life is unfair?
You can always create more cars, hence the depreciation.
I agree that we could have housing that depreciates, but to get there we have to remove government restrictions on supply. It would also help if we shifted our taxation schemes away from things that we want (income) and toward things where deadweight losses aren’t a thing (land). Housing price increases aren’t caused by rando things like RealPage, they’re caused by a government fiat that restricts the market from providing the necessary supply (in a built up area like this that means building up).