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Seattle-Bellevue-Everett, Washington

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Seattle-Bellevue-Everett, Washington COMPREHENSIVE HOUSING MARKET ANALYSIS Seattle-Bellevue-Everett, Washington U.S. Department of Housing and Urban Development Office of Policy Development and Research As of May 1, 2017 Summary Economy Rental Market Nonfarm payroll growth in the Seattle The overall rental housing market in Housing Market Area HMA averaged 3.0 percent, annually, the HMA is tight, with an estimated from 2012 through 2016, contribut- vacancy rate of 4.0 percent, down from ing to strong economic conditions. 7.1 percent in April 2010. Apartment During the 12 months ending April market conditions are tight, with a San Juan 2017, nonfarm payrolls increased by 4.8- percent vacancy rate during the first Skagit Island Puget Sound 52,000 jobs, or 3.2 percent, compared quarter of 2017, down from 5.3 percent Snohomish with the number of jobs during the 12 a year earlier, and the average asking Clallam Chelan Jefferson months ending April 2016, and the rent increased more than 7 percent, to Kitsap King unemployment rate declined from $1,606 (Reis, Inc.). Demand is estimated 4.4 to 3.7 percent. During the 3-year for 32,750 new, market-rate units during Mason Kittias Pierce forecast period, nonfarm payrolls are the forecast period. The estimated Thurston Yakima expected to increase by an average of 20,800 units currently under construc- Situated along the Puget Sound in north- 36,600 jobs, or 2.2 percent, annually. tion will meet a portion of the forecast western Washington State, the Seattle- demand (Table 1). Bellevue-Everett Housing Market Area Sales Market (hereafter, the Seattle HMA) consists of Table 1. Housing Demand in the Sales housing market conditions in King and Snohomish Counties and is Seattle HMA* During the the HMA are currently tight, with an Forecast Period coterminous with the Seattle-Bellevue- estimated vacancy rate of 1.2 percent, Everett, WA Metropolitan Division. Seattle HMA* down from 2.6 percent in April 2010. The HMA is recognized as a center for Sales Rental During the 12 months ending April Units Units aeronautical design and manufacturing, 2017, new and existing home sales Total demand 33,500 32,750 software design, and trade, with the totaled 60,350, up 6 percent from the Under construction 3,250 20,800 presence of globally renowned compa- previous 12 months, and the average * Seattle-Bellevue-Everett HMA. nies that include The Boeing Company, Notes: Total demand represents estimated sales price increased 9 percent, to Microsoft Corporation, and Amazon. production necessary to achieve a balanced $537,600 (CoreLogic, Inc., with ad- market at the end of the forecast period. com, Inc. Units under construction as of May 1, 2017. justments by the analyst). During the A portion of the estimated 28,000 other forecast period, demand is estimated vacant units in the HMA will likely satisfy some of the forecast demand. The forecast for 33,500 new homes. The 3,250 period is May 1, 2017, to May 1, 2020. homes currently under construction Source: Estimates by analyst Market Details and a portion of the estimated 28,000 Economic Conditions ............... 2 other vacant units in the HMA that may return to the market will satisfy Population and Households ..... 7 part of the demand (Table 1). Housing Market Trends ............ 9 Data Profile ............................. 16 Economic Conditions 2 conomic conditions in the trend, jobs losses as a result of the ESeattle HMA are strong, with Great Recession were more severe in the rate of job growth outpacing growth the HMA than in the national economy, in the nation since 2011. Nonfarm with nonfarm payrolls averaging a payroll growth in the HMA averaged decline of 3.2 percent a year from 3.0 percent a year from 2012 through 2009 through 2010, compared with a 2016, compared with the national 2.5-percent average annual decline in average annual growth rate of 1.8 the nation. Current nonfarm payroll percent. During the 12 months ending jobs in the HMA are more than 11 YSIS April 2017, nonfarm payrolls increased percent higher than the peak recorded by 52,000 jobs, or 3.2 percent, to 1.66 during 2008 before the economic ANAL million jobs (Table 2). By comparison, downturn. The unemployment rate payrolls increased by 51,700 jobs, or averaged 3.7 percent during the 12 3.3 percent, during the 12 months months ending April 2017, down ending April 2016. Job gains occurred from 4.4 percent a year prior, a result in every nonfarm payroll sector except of resident employment growth far for manufacturing during the past exceeding growth in the labor force. 12 months. In contrast to this recent By comparison, the unemployment rate averaged 3.9 percent from 2005 Table 2. 12-Month Average Nonfarm Payroll Jobs in the Seattle HMA,* by Sector through 2008, during a period of eco- nomic expansion, and peaked in 2010 12 Months Ending Absolute Percent April 2016 April 2017 Change Change at 9.4 percent because of the national Total nonfarm payroll jobs 1,610,100 1,662,100 52,000 3.2 recession. Figure 1 shows trends in Goods-producing sectors 260,000 260,200 200 0.1 the labor force, resident employment, Mining, logging, & construction 88,900 94,200 5,300 6.0 and the unemployment rate from 2000 Manufacturing 171,100 166,000 – 5,100 – 3.0 COMPREHENSIVE HOUSING MARKET Service-providing sectors 1,350,100 1,401,900 51,800 3.8 through 2016. • Wholesale & retail trade 240,900 251,000 10,100 4.2 Transportation & utilities 53,800 56,200 2,400 4.5 The HMA is recognized as a global WA Information 97,100 103,900 6,800 7.0 center for high-technology (hereafter, Financial activities 82,300 84,100 1,800 2.2 high-tech) industries, including aero- Professional & business services 244,100 251,600 7,500 3.1 Education & health services 202,700 211,300 8,600 4.2 nautical design and manufacturing, erett, Leisure & hospitality 157,600 165,200 7,600 4.8 software design, telecommunications, Other services 57,100 59,000 1,900 3.3 and data processing, hosting, and Government 214,500 219,700 5,200 2.4 related services. These industries are vue-Ev * Seattle-Bellevue-Everett HMA. Notes: Numbers may not add to totals because of rounding. Based on 12-month classified in portions of the informa- averages through April 2016 and April 2017. tion, government, manufacturing, and Source: U.S. Bureau of Labor Statistics professional and business services Figure 1. Trends in Labor Force, Resident Employment, and Unemploy- sectors. The HMA is home to the ment Rate in the Seattle HMA,* 2000 Through 2016 global headquarters of Microsoft and Seattle-Belle 10.0 Amazon.com, with 45,535 and an 1,690,000 estimated 25,000 to 35,000 employees, 1,590,000 8.0 1,490,000 respectively, statewide (Table 3). 6.0 1,390,000 Although The Boeing Company moved 4.0 1,290,000 its headquarters to Chicago in 2001, Labor force and Labor force Unemployment rate resident employment resident 1,190,000 2.0 it remains the largest employer in the 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 HMA, with 69,058 employees state- Labor force Resident employment Unemployment rate wide. From 1996 through 2000, the * Seattle-Bellevue-Everett HMA. HMA experienced particularly strong Source: U.S. Bureau of Labor Statistics Economic Conditions Continued 3 Table 3. Major Employers in the Seattle HMA* Number of Name of Employer Nonfarm Payroll Sector Employees The Boeing Company Manufacturing 69,058 Microsoft Corporation Professional & business services 45,535 University of Washington Government 34,000 Amazon.com, Inc. Wholesale & retail trade 25,000–35,000 Providence Health & Services Education & health services 17,553 Wal-Mart Stores, Inc. Wholesale & retail trade 16,000 Fred Meyer Stores Wholesale & retail trade 15,500 Costco Wholesale Corporation Wholesale & retail trade 14,000 Swedish Medical Center Education & health services 11,640 YSIS Starbucks Corporation Leisure & hospitality 11,000 * Seattle-Bellevue-Everett HMA. ANAL Note: Excludes local school districts. Sources: Moody’s Economy.com; company websites economic growth, with nonfarm the late 1990s has allowed the payrolls increasing by an average of economy to diversify and become 48,700 jobs, or 3.8 percent, a year, increasingly resilient. largely the result of rapid growth in Professional and business services high-tech industries (referred to as the tied with wholesale and retail trade dot.com bubble), whereas national as the largest sector in the economy, nonfarm payrolls increased at an each representing approximately 15 average annual rate of 2.4 percent. percent of total nonfarm payrolls in Subsequent to that growth, the dot. the HMA (Figure 2). During the 12 com bubble collapsed, bringing months ending April 2017, the profes- about a national recession, and the sional and business services sector COMPREHENSIVE HOUSING MARKET effects on the HMA were significant. added 7,500 jobs, or 3.1 percent, to • From 2001 through 2003, nonfarm 251,600 jobs. Part of this growth can payrolls in the HMA declined by an WA be attributed to hiring in the computer average of 25,400 jobs, or 1.8 percent, systems design and related services annually. By comparison, nationwide industry, which added an average of payrolls declined at an average annual erett, 2,350 jobs, or 7.3 percent, annually, rate of 0.4 percent. The dot.com from 2010 through 2016. Growth recession and the Great Recession trends in the professional and business greatly impacted the HMA; however, vue-Ev services sector mirrored overall eco- growth in high-tech industries since nomic conditions in the HMA, with Figure 2.
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