The Most Affordable Neighborhoods in Seattle
Our real estate market is settling down. It's the perfect time to buy if you know where to look
By Sheila Mickool
February 13, 2015
Note: This article was published in the March 2015 issue of Seattle magazine. And while home prices are changing all the time, we examined the issue of neighborhood affordability more recently in our March 2018 issue. You can read those stories here and here.
You’ve heard the horror stories: Seattle-area home prices are rising out of control, with multiple offers, sometimes at thousands of dollars over the asking price.
Evelyn (not her real name), an attorney who lives near Lake Washington with her family in one of Seattle’s upscale neighborhoods, experienced the stories firsthand. When a “For Sale” sign appeared on the lawn of a waterfront home down the street, she quickly assessed the market and—knowing that there would be competition for the house—promptly submitted an offer at $200,000 more than the asking price. “It was a clean, noncontingent offer with an expedited closing,” Evelyn says, “but we didn’t get the house. We weren’t even in the running. There were 11 other offers, and ours wasn’t one of the top three.”
The dollars may differ—after all, some condos cost less than Evelyn’s $200,000 bump—but similar scenarios are playing out all over the greater Seattle area at all price points, says Patt Sellen, a Re/Max managing broker who focuses on the Eastside. This is true especially in the “middle range” of the market, which represents 50 percent of all home sales and excludes the most expensive and least expensive homes on the market. “It is not unusual for buyers to make 10 or 12 offers on homes before they finally get one,” Sellen says.
A stunning report by Redfin senior data analyst Troy Martin reveals the root cause of the recent surge: a lack of inventory. In an analysis of total home sales in King and Snohomish counties from 2011 to 2014, Martin found that the total number of homes for sale in the middle price range fell by 33.4 percent, while the prices that constitute the middle range increased by 36.5 percent (moving from $179,900–$449,900 in 2011 to $256,000–$599,900 in 2014). It’s a double-whammy hit to the middle class and a trend that some believe puts the Darwinian principle of “survival of the richest” on full display.
Blame it on Seattle’s meteoric success and desirability as a place to live, says Nela Richardson, Redfin’s chief economist. “All you need to know to understand is that Amazon decided to keep its headquarters in town—“it is hugely impactful to our region and is symbolic of the crux of the matter regarding rising housing costs in Seattle,” she says.
Millennials are drawn to companies like Amazon and to Seattle, with its universities, high quality of life, desirable amenities, astonishing natural beauty and relatively lower cost of living (by comparison, rents are much higher in Silicon Valley than they are in Seattle). Companies, especially those in high tech and the sciences, are drawn to areas where millennials congregate. “It’s a win-win for both,” Richardson says. “Millennials get to live in a vibrant community with a lower cost of living, and companies get talented individuals for less than it would cost elsewhere.”
The symbiotic relationship works big time in Seattle. “The national average for unemployment is 5.6 percent, but Seattle’s is only 4.6 percent,” Richardson says. “The economy here is strong; jobs in the technology and scientific sectors are growing like crazy.”
According to the Urban Land Institute and PricewaterhouseCoopers, Seattle is one of the fastest-growing cities in the U.S. (with 6.9 percent population growth in the past three years) and is one of the country’s top real estate markets (ranking eighth overall, third for development and fourth for investment). Seattle is now considered a gateway city (like New York, Boston and Los Angeles), making it a magnet for foreign investment.
All of which leads to increased competition in real estate, and higher rents and home prices. But Richardson doesn’t think Seattle will become the next San Francisco, where the service sector (nurses, firefighters, teachers, etc.) has been priced out of the city. “In 2013, we had an abnormal year in real estate. There were a lot of international buyers with cash, 51 percent of offers by Seattle Redfin agents faced competition from other buyers,” Richardson says. “In 2014, that dropped to 44 percent.”
Richardson believes that in 2015, Seattle’s real estate market will be robust and experience solid growth. However, the frenzy of the past two years will continue to dissipate, and the market will experience a return to more normal—and healthy—buying and selling cycles.
For those pushed out of the market due to increased competition in the past year or two, 2015 represents an opportunity. This may be the perfect time to buy that first home or consider trading up.
Sure, Seattle homes are more expensive than they used to be, but there are still middle-range homes in decent neighborhoods, if you know where to look. With the help of agents and buyers, we’ve identified six unique communities with a mix of housing options (apartments, condos and homes) and demographics (singles, families and seniors). All have local amenities, such as parks and trails, and access to good schools and nearby services.
1. Puget Ridge (West Seattle)
This West Seattle gem is located just south of the West Seattle Bridge, east of Delridge Way. Puget Ridge residents are passionate. “We love Puget Ridge because it’s a great community; it’s close to the amenities of downtown Seattle and convenient to both of our workplaces,” say Nancy and Jason, who both work in the health care field and moved from a rental in Montlake with their cat, Karma. “The location is so convenient to the Junction as well as Alki, yet our immediate neighborhood is quiet. There is even a neighborhood park with a P-Patch to grow produce for neighbors and food banks.” There are two cohousing communities on Puget Ridge. Kristen Walsh, who lives in Puget Ridge Cohousing with her family, enjoys the community as well as watching her “children growing up surrounded by adults who know them and love them.” Redfin broker Joseph Hunt says the views of the Seattle skyline at night are stunning and the lots are a little larger here. “You can buy a new-construction home for $600,000, but you can also buy an older 1,400- to 1,800-square-foot home that needs some updating for $250,000–$290,000,” Hunt says.
2. Upper Rainier Beach
There are still many homes in the $400,000 range in South Seattle, including the Upper Rainier Beach neighborhood; Photo by Alex Crook
There is no doubt in Redfin broker Collin Horn’s mind: “You get the most bang for your buck in Upper Rainier Beach. Good houses, many remodeled. Lake Washington views. Excellent neighbors. Services are close by. You can buy a 1,700-square-foot house with a hot tub, two decks and fabulous views close by the park for around $400,000.” Attorney Matthew Kaminski and his wife were looking in the Central District, but one trip to check out a remodel in Upper Rainier Beach, located a little more than a mile south of Seward Park, a neighborhood they had never before considered, is all it took for them to change their plans. “The house was beautiful, and the neighborhood was lovely; it felt cohesive and welcoming,” Kaminski says. “You could feel the magic right away. People are warm and friendly, there’s a jovial spirit; you feel that you belong. Neighbors have gardens; they share their fruits and vegetables.” They also share treats, like the warm apple turnover cake a neighbor brought to welcome the Kaminskis to their new home. Kaminski’s favorite thing to do is to sit on the deck early in the morning, sip his coffee and gaze contentedly at the lake. “I love it here,” he says.
In addition to more affordable homes, Kenmore’s perks include proximity to Lake Washington, Inglewood Golf Club and Saint Edwards Park; courtesy of Kenmore city hall
Located on the north end of Lake Washington, “Kenmore is not only affordable, with homes in the $400,000 range, it’s a great community for dual-income families commuting to Seattle, Bellevue and Redmond,” says Re/Max managing broker Patt Sellen. “You get a lot for your money here,” says Jason Maybell, a Coldwell Banker Bain broker who recently sold a 2,360-square-foot home (4 bedrooms, 2.5 bathrooms) on a 15,000-square-foot lot in the Arrowhead development for $535,000 in three days. “The same house in Issaquah or Sammamish would have sold for $630,000–$650,000.” Lainie Colburn lives and works in Kenmore; she’s director of events at Inglewood Golf Club (and the writer’s daughter). She has lived in the community for 14 years. “I love the location; I can get to Seattle or Bellevue in 20 minutes on back roads,” Colburn says. “Northshore schools are great, I really enjoy taking my boys to Saint Edwards State Park for hikes, and there’s a real sense of community here, with family-owned restaurants, a butcher and drugstore nearby. It’s a wonderful neighborhood.”
4. South Newcastle
On the Eastside in Newcastle, the more affordable homes are south of Coal Creek; photo by Alex Crook
Redfin broker Michael Fleming says we’re almost back to 2006–2007 peak pricing, and Newcastle, located just south of Bellevue, is no exception, with homes on the north side of Coal Creek costing $650,000–$1 million and up.” But south of Coal Creek, buyers can pick up a mid-century single-level home for less than $400,000, according to Fleming. “It’s a popular choice for young professionals who don’t have a lot of money and are willing to give up the remodeled home requirement in exchange for a solid 1,600-square-foot home with a nice big yard.” Sandra Canaday and her husband, who both work in health care, found the perfect home here, with ample space and a big yard.
“South Newcastle is a fantastic community; it’s family-oriented, the landscaping is lush, beautiful and clean, and I love the location—near the 405 and 90, for easy commutes to Issaquah and Renton,” Canaday says. And talk about perfect timing: “We found out just days after moving in that our first baby will arrive in 2015.”
New residents Yusuke, a software engineer, and Parisa, a registered nurse, wanted a neighborhood that was an easy commute, had a nice assortment of restaurants and was family friendly for our future children. “Pinehurst is a good combination,” says Yusuke. “very close to Northgate and its transit center, a growing restaurant community on Lake City Way, and a good school system.” Kyle May just snagged a beautifully redone Craftsman in the neighborhood and appreciates that “the grocery store, the gym and Northgate are just a couple of blocks away, but when I’m home, it’s very quiet and the neighbors are friendly.” He sees lots of walkers and joggers, but there is surprisingly little auto traffic on the street. May still can’t believe his good fortune and loves his new home. “The space is well-used, the remodeling is superb, it has a great deck and, best of all, a double car garage—a rare find in a city neighborhood,” May says. The area just north of Northgate Mall is going through a major transition, says Redfin broker Robin McCue, with new restaurants, coffee shops and other services moving in. “While new construction will cost around $700,000, remodels run from $450,000 to $550,000,” McCue says.
6. Kingsgate (Kirkland)
Close to Kirkland’s charming downtown waterfront, Microsoft, EvergreenHealth medical center and Woodinville’s wineries, Kingsgate is located east of I-405 in Kirkland. Kingsgate is a neighborhood in transition, with a wide range of housing options, from tiny ramblers in distress to new construction on smaller lots with amazing valley views of the Woodinville area, says KC Brants, a Redfin broker. Buyers can find good homes in the $400,000–$500,000 range, with the sweet spot being around $425,000. Pamela Cornell, director of the Move Over Mozart (MOM) music program for kids, has lived in Kingsgate for 15 years. “I love how close everything is: groceries, banks, shopping centers, schools, church and great neighbors,” Cornell says. “I also love the trees, and it’s just a short walk to a number of different wooded trails for hiking and biking. As a cyclist, any direction I go is downhill, which means I always have a hill climb at the end, guaranteeing a workout if I want to get home—which may not sound like a bonus, but it has definitely made me stronger!”
How to Break Into the neighborhood of your dreams
You’ve found a neighborhood you love, but nothing is available in your price range. Before giving up on your dream, consider these strategies
1. Rent, look to buy
Renting where you want to buy can lead to a deal. One health care executive recently rented a luxury condo in Kirkland’s Lakeview neighborhood with expansive views of the Olympic Mountains, Lake Washington and the Seattle skyline. Renting allows him to enjoy the perks of the neighborhood while he scouts the opportunities, builds relationships with the locals, gathers intel on the community, checks out the latest listings and keeps in touch with the elderly widow who’s thinking about selling—all of which will help him beat potential competition to the deal.
2. Find the affordable block
The median sale price of homes in the Norkirk neighborhood of Kirkland, just north of downtown, is about $750,000. But the small, mid-century ranch homes on Fourth Place in that neighborhood sell for around $420,000. The median price of a home in pricey Madrona is $1 million–plus, but savvy buyers can snag older homes on 30th Avenue for $470,000 and up. In much coveted Ballard, the median price is around $530,000, but $300,000 could recently buy a beautifully remodeled mid-century condo on 58th Street in the heart of Ballard’s vibrant downtown.
3. Live on the edge
The modest homes in south Mount Baker ($350,000–$400,000) may not look anything like the elegant lake-view mansions farther north ($1 million–plus), but they are still in Mount Baker, close to beautiful parks and other neighborhood amenities, and have high walkability, transit and biking scores. Hawthorne Hills, a North Seattle neighborhood located next to tony Windermere, boasts a median list price of $1.5 million for view homes, but an updated townhouse on the Burke-Gilman Trail on the lower eastern edge of the nabe will sell for about $550,000—and residents can walk or bike to the University of Washington, University Village and Magnuson Park.
4. Buy the ugly house
Re/Max managing broker Patt Sellen says that one great strategy, for those who are handy, is to buy the least expensive home in the neighborhood—the fixer-upper that no one else wants—and show it some love. Replace the windows, paint it, and add new appliances and flooring. Hold it, enjoy it and sell it at the right time. Use the proceeds to move up in the neighborhood. Most neighborhoods, even upscale communities, have a few ugly ducklings.
5. Live (and rent) like the rich
Beautiful neighborhoods such as Medina are beyond the reach of most buyers. However, from time to time, a rental on an estate becomes available. If you are willing to forego owning a home and act quickly, you can live on private, lush grounds in the studio over the garage, in a tiny cottage down the lane or a small one-bedroom suite overlooking a chateau-like courtyard. To grab one of these, you need a boatload of patience and the homing instincts of a hunter. These units are rare and move fast—mostly by word of mouth or drive-by responses to small, discreet “For Rent” signs posted at the edge of driveways. Prospective renters who miss out often leave their names and numbers with owners, hoping for a call the next time the unit becomes available.
6. Look at the whole picture
Are there good public schools nearby that will spare you thousands in private school tuition? Parents with young kids might consider Wedgwood with its proximity to highly ranked Wedgwood Elementary and Eckstein Middle schools. Can you ditch the car and all the associated costs and take transit to work—better yet, can you walk or cycle—and really cut down your monthly nut? Zero in on transit hubs such as First Hill or the University District.