Zillow's Skylar Olsen explains how housing market is pulse of economy
The housing market in Seattle is hot and it looks like it won’t cool any time soon.
Home owners and renters in the central Puget Sound are paying more in mortgage and rents because of the booming tech sector and because people want to live here, Skylar Olsen, senior economist of Seattle-based real estate company Zillow, told attendees at the 2017 AWB Legislative Day and Hill Climb.
While rental and mortgages prices are beginning to slow throughout the nation, the opposite is happening in Seattle, Olsen said.
“Affordability will improve for most places across the U.S,” she said. “That is not the case in Seattle.” That’s because Seattle outsiders want to move to the city, and, when they do they want to stay.
Olsen, who spoke about the “state of the economy,” focused her remarks on the fast-growing real estate and rental market. She said Seattle is leading the nation in mortgage and rental costs, and the prices don’t look like they are going to slow down anytime soon.
Home value growth in the Seattle market is among the fastest in the U.S at 12.2 percent. The numbers of employees moving to Seattle for employment is skyrocketing, Olsen said, and the fact that these new residents are already established and have the means to purchase homes has further restricted housing in the market.
“There is a huge incentive to move up here because the take-home income is larger than those in cities like San Francisco,” she said.
Currently, Seattle rental residents are seeing inflation of rental prices that they have never seen. Renters don’t want to move out of the area, but their ability to save money is dampened by the increasing prices. “As share of income spent on rent rises in Seattle, the share of people who save nothing climbs rapidly.”
Trading distance is one way to maintain affordability, she said. With high rental prices, millennials are unable to save money, which means they are moving farther away from the city. This transition has pushed people out of Seattle and has increased commuter traffic going into Seattle.
Olsen fielded questions about how lawmakers can help increase the stock of affordable housing, and how much a role the Growth Management Act has played.
Ultimately, Olsen said she favors “upzoning” or increasing the density of neighborhoods, and giving individuals more choice.