Amazon’s Housing Equity Fund came calling just in time to spur movement on Jaebadiah Gardner’s vision for an affordable housing project in the heart of Seattle’s Central District. Gardner Global, which seeks to create cycles of wealth for people who have previously been left out of these opportunities, is the recipient of a $4.5 million grant that will support a 122-unit project at 23rd Avenue and Union Street.  Amazon’s support will enable Gardner to go vertical with the project in mid-2025, in a neighborhood that has historically been one of Seattle’s most diverse.

In early 2021, the Seattle tech giant pledged $2 billion toward affordable housing. Since then, the Amazon Housing Equity Fund has focused on regions where its corporate workforce has grown or is planning to grow. As of November, the company has funded 1,300 housing units in Seattle.

Amazon has taken care to handpick developer and housing associations instead of just funding nonprofits or city housing offices in bulk. According to Alice Shobe, global director of Amazon in the Community, leaving the specific details to Gardner Global, in this case, was a conscious effort to allow those who know the community best to own strategy and outcomes.

Amazon has contributed to the development of affordable housing in our region through grants and low-rate loans. These have funded projects that account for almost 4,400 units so far. The company also contributed $25,000 in support of the Seattle Housing Levy, which voters approved in November.

Playing the role of a hands-off financier and partner, the Amazon Housing Equity Fund will help the Gardner Global project move along more quickly, avoiding the unpredictable timeline that developers often face. Ultimately, Amazon put the group in a position they would not otherwise be in: one step closer to decreasing the wealth gap with communities of color and creating a new wealth cycle instead.

This post was based on information found on Puget Sound Business Journal.  

By 2050, roughly 4,135 existing Seattle buildings larger than 20,000 square feet must cut their greenhouse gas emissions to zero. The Seattle City Council passed legislation on Tuesday, December 12th, enacting the Building Performance Emissions Performance Standard, or BEPS. 

BEPS will require skyscrapers, low- to high-rise buildings, multifamily residences, retail spaces, restaurants, churches, schools, universities and community centers that fit the criteria to meet the proposed bar. It’s a timely measure as buildings account for 37% of Seattle’s total core emissions, behind cars and aviation, according to city data.  

The standards, which will roll out gradually over time, will reduce existing structures’ dependence on greenhouse gas sources, primarily oil and natural gas, including fossil fuel-powered furnaces and water heaters. Several recent projects have already been upgraded to curb their climate impacts.  

A multifamily affordable housing unit cut its energy use by 35% and its fossil fuels by 100% with the installation of heat pump water heating, new roof insulation, heat pump cooling in the community  room, and an energy recovery system. Similarly, the Washington State Department of Services for the Blind replaced windows, upgraded lighting, and installed a heat pump water heater and heat pump heating and cooling, cutting energy use by 70% and fossil fuels by 100%.  

With this impactful legislation, Mayor Harrell hopes that other cities are inspired to follow suit in taking collective action to reduce urban zones’ heaviest contributions to climate change.  

This post was based on information found on GeekWire and Puget Sound Business Journal. 

Just like December temperature variations, our local real estate market continues to feel up and down. Interest rates, regional economic conditions and seasonal market shifts have meant rising home prices in some areas and drops in others. While the expected winter slowdown means overall lower inventory, buyers are still willing to compete for plum properties in a diminishing pool of available listings.

A slight decrease in interest rates has raised cautious optimism in our region. Interest rates fell to around 7.2% as of December 1, compared to 7.8% in October. A continued trend in this direction could signal some welcome positivity in the market as we move into the new year.

In King County, the expected decline in winter inventory is pushing up year-end home prices. The region saw a 7% year-over-year increase in the median residential sold price, from $827,000 in November 2022 to $885,500 last month. Buyers are still showing up: there’s steady demand and potential competition for each available home that’s in good condition and well-priced. King County condos also saw a year-over-year price increase, with the median sold price up 4% in November to $485,000.

Seattle saw a 5% increase in the median sold price of a single-family home, up from October’s $900,000 to $944,000 last month. The market kept some momentum in November, with 48% of Seattle homes selling at or above asking price and 79% going under contract in 30 days or less. Condo prices saw a 21% year-over-year jump, from $480,500 in November 2022 to $582,750 last month. This price growth flew in the face of significant supply, at 3.4 months of inventory.

The Eastside median residential sold price experienced a modest decline in November, down 1% from October’s $1,420,000 to $1,400,000 last month. However, the November price was still up 6% from November 2022, while 75% of sold listings went under contract in 30 days or less. Residential inventory remained fairly flat on the Eastside, increasing slightly from 1.5 months in October to 1.6 months in November. Eastside condo prices increased last month, with a median sold price of $620,000, up from $569,500 in November 2022.

Snohomish County saw a year-over-year bump in prices last month. The median sold price for a single-family home rose from $700,000 last November to $725,000 this November. Supply stood at just 1.3 months at the end of the month, down 32% from this time last year. Condo prices also rose, from $507,500 in November 2022 to $521,209 last month.

As winter unfolds, it’s crucial for buyers and sellers to work with a knowledgeable broker to navigate this churning real estate market. Together you can create a strategy that best supports your real estate goals for the new year.

Matthew Gardner’s Top 10 Predictions for 2024

1. Still no housing bubble

This was number one on my list last year and, so far, my forecast was spot on. The reason why I’m calling it out again is because the market performed better in 2023 than I expected. Continued price growth, combined with significantly higher mortgage rates, might suggest to some that the market will implode in 2024, but I find this implausible.

2. Mortgage rates will drop, but not quickly

The U.S. economy has been remarkably resilient, which has led the Federal Reserve to indicate that they will keep mortgage rates higher for longer to tame inflation. But data shows inflation and the broader economy are starting to slow, which should allow mortgage rates to ease in 2024. That said, I think rates will only fall to around 6% by the end of the year.

3. Listing activity will rise modestly

Although I expect a modest increase in listing activity in 2024, many homeowners will be hesitant to sell and lose their current mortgage rate. The latest data shows 80% of mortgaged homeowners in the U.S. have rates at or below 5%. Although they may not be inclined to sell right now, when rates fall to within 1.5% of their current rate, some will be motivated to move.

4.Home prices will rise, but not much

While many forecasters said home prices would fall in 2023, that was not the case, as the lack of inventory propped up home values. Given that it’s unlikely that there will be a significant increase in the number of homes for sale, I don’t expect prices to drop in 2024. However, growth will be a very modest 1%, which is the lowest pace seen for many years, but growth all the same.

5. Home values in markets that crashed will recover

During the pandemic there were a number of more affordable markets across the country that experienced significant price increases, followed by price declines post-pandemic. I expected home prices in those areas to take longer to recover than the rest of the nation, but I’m surprised by how quickly they have started to grow, with most markets having either matched their historic highs or getting close to it – even in the face of very high borrowing costs. In 2024, I expect prices to match or exceed their 2022 highs in the vast majority of metro areas across the country.

6. New construction will gain market share

Although new construction remains tepid, builders are benefiting from the lack of supply in the resale market and are taking a greater share of listings. While this might sound like a positive for builders, it’s coming at a cost through lower list prices and increased incentives such as mortgage rate buy downs. Although material costs have softened, it will remain very hard for builders to deliver enough housing to meet the demand.

7. Housing affordability will get worse

With home prices continuing to rise and the pace of borrowing costs far exceeding income growth, affordability will likely erode further in 2024. For affordability to improve, it would require either a significant drop in home values, a significant drop in mortgage rates, a significant increase in household incomes, or some combination of the three. But I’m afraid this is very unlikely. First-time home buyers will be the hardest hit by this continued lack of affordable housing.

8. Government needs to continue taking housing seriously

The government has started to take housing and affordability more seriously, with several states already having adopted new land use policies aimed at releasing developable land. In 2024, I hope cities and counties will continue to ease their restrictive land use policies. I also hope they’ll continue to streamline the permitting process and reduce the fees that are charged to builders, as these costs are passed directly onto the home buyer, which further impacts affordability.

9. Foreclosure activity won’t impact the market

Many expected that the end of forbearance would bring a veritable tsunami of homes to market, but that didn’t happen. At its peak, almost 1-in-10 homes in America were in the program, but that has fallen to below 1%. That said, foreclosure starts have picked up, but still remain well below pre-pandemic levels. Look for delinquency levels to continue rising in 2024, but they will only be returning to the long-term average and are not a cause for concern.

10. Sales will rise but remain the lowest in 15 years

2023 will likely be remembered as the year when home sales were the lowest since the housing bubble burst in 2008. I expect the number of homes for sale to improve modestly in 2024 which, combined with mortgage rates trending lower, should result in about 4.4 million home sales. Ultimately though, demand exceeding supply will mean that sellers will still have the upper hand.

About Matthew Gardner

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.