We’ve had a strange year here in Seattle. When the novel coronavirus first really came to the U.S., it came to Seattle. I remember being both concerned, of course, about the health and well-being of my family, friends, and everyone else, but also of the real estate market. I’ve been a professional real estate investor for a long time, and have seen recessions, a Great Recession, resurgences, and more, but I had yet to see a pandemic.
We did fairly well. Through tough measures, it was largely contained. That’s not to say we’re out of the water, but I am cautiously optimistic. And beyond that, I am very optimistic about real estate investing, especially when it comes to fix-and-flips and investment properties.
This is how we will make this strange year better, and how we will make real estate investing in Seattle work in the future. To do that, though, here’s what you need to consider.
Understanding Seattle Real Estate Investing in Uncertain Times
If you aren’t too familiar with real estate investing, you might be wondering why I am feeling bullish. After all, these are very strange times, and nothing feels certain. But, we can be certain of some things.
See, when the market is in flux like this, it presents great opportunities for investors. That’s true in general, and I think very true in the case of Seattle, which has a lot going on that could turn the market in our favor.
In a recession, no matter the cause, a lot of people’s incomes will change greatly. They’ll be looking to unload burdensome houses and get cash. That’s where we come in. We help them sell quickly and avoid foreclosure, with all the damaging legal and economic implications that come with it. It’s part of how we make a difference in the community.
Sooner or later, the market can and will rebound. Even now, there are still a lot of people who haven’t been impacted who will be looking to buy.
So, is it a good time to invest in real estate? The answer is “yes.” But, only if you understand the way the market works.
The Top Considerations for Real Estate Investing in Seattle
As I survey the market, bringing a lot of my experience to bear, a few things stand out. Here are a few of them.
1. Prices are Dropping, But Only Relative to Seattle
Prices in King County have dropped by nearly 10%. That’s a huge plunge, but only when you look at it abstractly. In reality, prices are only 4% lower than they were this time last year and higher than they were in January.
And beyond that, the average home price in King County is $672,000. That’s $150,000 more than Snohomish County, close to double Kitsap and Pierce. Despite falling housing prices, Seattle is still a market with a ton of upside.
Why does that matter? Because while housing prices may stay high, the unemployment rate doesn’t stay low.
2. Unemployment Rate is Still High
According to the Bureau of Labor Statistics, the Seattle Metro Area had an unemployment rate of 3.0%. King County was at 2.3%. Both were below the Washington state average of 4.1%.
Now, suddenly, look at these numbers.
- Washington (state): 15.8%
- King County: 14.9%
- Seattle Metro: 16.7%
That is a lot of people suddenly out of a job. While some know this is temporary, for thousands, their economic understandings have been turned upside down. And they might be looking to sell.
That means they’ll be looking for someone trustworthy to sell to. But does that mean you’ll have any buyers after the rehab?
3. Top Employers are Still Strong
That said, Seattle still has strong economic news for real estate investors. The top employers include Boeing, Microsoft, Amazon, and Walmart. The latter two announced that they will be hiring hundreds of thousands more people over the next year and profits are going up. While many of those are warehouse jobs, these companies expect to need more engineers and data techs to manage everything.
Boeing and Microsoft anchor a tech sector that is essentially weathering the recession, which means that long-term market trends of more educated, affluent people moving to Seattle will continue. As housing stock opens up, they’ll be looking to move here. So, if you buy investment deals wisely, finding buyers shouldn’t be a major concern.
4. Better Houses Opening Up
Now, I know a lot of my fellow Seattle real estate friends might be saying “But, aren’t there already a lot of abandoned homes in Seattle to invest in? Shouldn’t I just grab those for a lot cheaper?” I understand the sentiment, but that’s a hard no.
After all, there are a lot of problems with buying up abandoned homes in Seattle.
- Owners are hard to find
- Properties take more to repair
- Neighborhoods are rarely good
- Lots of unexpected costs
- Hard to sell
What’s better? Have houses in your portfolio that need minimal repair and are in better neighborhoods.
That’s what this recession can bring: houses from motivated sellers who weren’t originally planning on leaving but not might have to. That usually means more desirable opportunities with less work. It gives you a chance at great ROI.
All of this adds up to more houses for lower prices and fewer repairs—and a better chance of finding the right buyer quickly. You need to find the right motivated seller.
The Best Way To Get Leads in Seattle
For the rest of this year and going into next, we’re going to be in an interesting time. Most experts don’t think the market will be normal until the end of the year. That means opportunity. And the best way I’ve found to take advantage of the real estate investment opportunities here in Seattle is to become an independently owned and operated HomeVestors® franchisee.
See, as a franchisee, I get consistent and qualified leads. People who want to sell fast turn to a brand they know and trust. And, thanks to the nationwide “We Buy Ugly Houses®” campaign, everyone knows HomeVestors®. So, people looking to sell quickly call us. That’s where you can help a homeowner through an “ugly” situation.
In Seattle, we’ve been helping each other since the beginning. We will do so moving forward. If you want your real estate investing business to be at the forefront of helping Seattle rebuild, request information about becoming a franchisee today.
Each franchise office is independently owned and operated.