Puget Sound Real Estate: The Future of the NW, Part One

If you want to know where a company is headed, look at who they are hiring and what types of jobs they are recruiting for. The same logic can be applied to our Puget Sound housing market: Want to know where the Puget Sound housing market is headed? Take a look at where the local economy and job market are headed.

35 years ago we would have been talking about Boeing and Microsoft. Then it was Nordstrom and Starbucks, then Amazon, and now we have a whole bunch of players rising to the top. But two of the most interesting storylines are Space and Web3. Why are these so interesting? Because they have the potential to be anchor industries for an entire economy. Not just F5, Zillow, Redfin, Weyerhaeuser, TMobile-like companies that are incredible building blocks to add between anchor stores, but entirely new, eventually multi-trillion dollar industries – both have converged here in the Puget Sound rooted. Welcome to the first of a two-part WMU series – The Future of the Northwest.

Space Force Seattle

We’ve all heard of SpaceX and Virgin Galactic. But do you also know Jeff Bezos’ Blue Origin? SpaceX is currently the leader, but don’t count the third richest person in the world’s sidehustle, Blue Origin. Without a doubt, the next physical frontier man must conquer is space. From satellite internet for everyone everywhere to warfare, travel and mining, Mastering Space can open multiple doors to multiple trillion dollar industries. To learn more about the future of the commercial space age, read the Harvard Business Review article.

So what’s happening in the local space scene? A lot. Not only does Blue Origin have about 880 job postings to add to its current 3,300 employees, but its growth rate of 27% is 5 percentage points ahead of Amazon’s notoriously ambitious growth rate and 20 percentage points ahead of Microsoft. The only other fast-growing large companies in Puget Sound are Salesforce (60.7% growth rate) and Apple (67.5% growth rate). It’s worth noting, however, that growth rates in tech have moderated somewhat relative to manufacturing due to the higher proportion of remote jobs. So not only is Blue Origin growing fast, but it has already sold over $100 million in future spaceflights to consumers and just landed a $1 billion contract from NASA to do initial designs for a human landing system for the Artemis-3 -mission to produce. As Blue Origin’s growth accelerates in the region, Unico Properties is betting $100 million in one of the worst commercial office submarkets in the PNW that sooner or later Blue Origin will need its newly owned Longacres campus.

summary

Economic snowball. Luckily for the Puget Sound housing market, this snowball has been rolling in the right direction since the early ’80s. Microsoft helped Amazon become what it has become by single-handedly increasing the tech talent pool that Amazon has been able to draw from. Now that we have both Microsoft and Amazon (over 135,000 combined employees in the region), Meta (formerly Facebook), Google, Salesforce, Apple and other tech titans moving in to enjoy the fruits of our incredible and powerful tech workforce.

As more Big Tech moves in, more and more new companies are formed. Zillow, Glassdoor, Expedia, Valve, Zulily, Convoy, AuthO, Offer Up, Smartsheet, and Zappos were all founded by former Microsoft employees. Being a little younger, Amazon doesn’t quite have the tree that Microsoft has, but Jet.com and Twilio found their founders at the local giant. Why am I mentioning this? Because it’s entirely possible that Boeing is Microsoft in this analogy, and Blue Origin is Amazon (now worth about $1.48). trillion Dollar). The sky is the limit…or dare I say the sky is not the limit for Blue Origin and what it could reach.

And with a rising tide lifting all boats, Blue Origin’s southeast King County headquarters could be fuel for an already scorching hot Renton, Kent, Auburn housing market — up 20.6% in the last 12 months alone. As always, time will tell how that ultimately plays out, but the prospect of having one of the biggest players (and maybe two if Boeing ramps up its space efforts) in what may be the biggest industries on Earth bodes well for the forward-thinking Housing market Puget Sound.

Current real estate trends

Week ending January 23, 2022

interest charges

According to Bankrate’s survey of major lenders, the 30-year mortgage rate rose to 3.75% last week, with 0.34 discount and origin points.

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Quick Take – Mortgage Market Week in Review

Inflation is high (which is bad news for fixed income investments like mortgage bonds – because the ROI, or return on investment, is the same every year); AND artificial demand for mortgage-backed securities eases as the Fed scales back purchases. The Fed bought about $47.8 billion worth of mortgage bonds last month. They are targeting $35.5 billion in purchases in January. The only tailwind mortgage-backed securities are enjoying right now is the sell-off in stock markets. The S&P is down about 6.8% year-to-date. Some of that money has found itself in the safety of mortgage-backed securities… but as you can see in the chart below, it’s not enough to offset the Fed’s slacking purchase plan and inflation fears.

WHAT YOU NEED TO KNOW WHAT PRICES ARE GOING:

• Good economic news or inflation = bad for mortgage rates.
• Bad economic news or deflation = good for mortgage rates.

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Puget Sound Housing Market: Charts and Data
A picture is worth a thousand words…

Absorption rates per real-time NWMLS data

The absorption rate is calculated as follows: (Pending Sales) / (Active + Pending Sales)

Resident in Seattle: 66.58%
Seattle Condos: 49.08%

Live in Bellevue/Redmond/Kirkland: 69.14%
Condominiums in Bellevue/Redmond/Kirkland: 67.83%

Resident of Everett/Marysville/Lake Stevens: 82.07%
Everett/Marysville/Lake Stevens condos: 85.19%

Live in Tacoma/Lakewood/Federal Way: 68.71%
Tacoma/Lakewood/Federal Way condos: 62.11%

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Scott Sheridan

Scott Sheridan is a Loan Officer at Primary Residential Mortgage, Inc. Scott brings a fresh millennial flavor to the industry, evident through his innovative ideas and pioneering solutions throughout his years in the mortgage industry. He knows the most modern, efficient and convenient ways to get things done. Scott combines these skills with a genuine love of his job and recent experience of what it’s like to be a first and second home buyer. You can follow Scott’s weekly market updates on his PRMI

source https://www.bisayanews.com/2022/01/24/puget-sound-real-estate-the-future-of-the-nw-part-one/