Seattle sits on a narrow strip of land separating Puget Sound to the west and Lake Washington to the east, with the towering 14,410-foot Mount Rainier visible on the southeastern horizon. Seattle is Washington's largest city, with an estimated population of just over 668,000 people as of 2014, up sharply from about 609,000 at the 2010 census. It has a median household income of more than $67,000 and an owner-occupied housing rate of 46.2%. Home to a fast-growing technology industry led by global giants Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN), Seattle and its surrounding areas have become highly attractive to entrepreneurs, young professionals and families from across the country.

Market Insights

While the Seattle real estate market felt the effects of the 2007-08 financial crisis, it suffered relatively moderate price declines compared to many other large cities across the country. The Seattle market reached historic highs in 2007 and 2008, with the median sale price for residential property fluctuating between $400,000 and $420,000. However, as the crisis spread, prices dipped to the $370,000 level before flattening through 2009 and into 2010. After a short-lived uptick in late 2010, the market softened further, bottoming out at $340,000 in January 2012. Near-continuous upward price momentum has been in place ever since. As of April 2016, the median sale price for a home in Seattle stood at an all-time high of $510,000, 21.4% above its pre-recession peak.

Sales volumes in Seattle show consistent seasonal fluctuations, with volumes declining through the fall and winter rainy season, rising in the spring, and peaking in the summer, typically in August. Rising volumes in the spring have generally coincided with rising market prices. Since 2012, most price growth in the market has occurred in the spring and early summer months. The fall and winter months have brought at worst a slight softening in prices before a new round of spring growth.

Property and Transfer Taxes

Property tax in Washington is imposed by state, county and municipal governments, school districts, and other special taxing districts, such as ports and libraries. Under the Washington State Constitution, the combined property tax rate for funding regular government operations is limited to $10 per $1,000 of taxable property value. However, voters may choose to approve additional special tax levies and bonds not covered by the constitutional limit. In 2016, the total property tax rate for Seattle property owners ranges from roughly $9.49 per $1,000 of taxable property value to $12.45 per $1,000, depending on the location of the property in the city. In Washington, the taxable value of a property is equal to its fair market value on the first of January each year.

The state of Washington imposes a 1.28% transfer tax on the sale of all real estate. Seattle imposes an additional tax of 0.5% for a combined tax burden of 1.78%. In Washington, this tax is also known as a real estate excise tax.

Most Expensive Neighborhoods

The most expensive neighborhoods in Seattle are clustered in the northern half of the city. In March 2016, the Queen Anne-Magnolia area of Seattle on the Puget Sound waterfront had a median sales price of $630,000, up 14% since the previous March. The neighborhood of North Seattle nearly surpassed that mark, producing a median price of $625,000, up 23.7% from the year prior. Just across the Interstate from Queen Anne-Magnolia, the neighborhoods of Capitol Hill and Madison Park combined to produce a median price of $605,000, up 11.5% over the previous year. In the greater Seattle metropolitan area, Mercer Island is home to the most expensive real estate in the area. The median price for homes on the Lake Washington island broke through $1.4 million in March, up an incredible 31.8% during the year.

Top Real Estate Websites

SeattleBubble.com is a terrific resource for Seattle real estate news and astute analysis of local market trends. The website hosts an extensive reference section and a free real estate-focused forum. The Seattle Times maintains a real estate portal on its website, offering news coverage and analysis of the local market. The website is at SeattleTimes.com. Although targeted primarily at real estate professionals, the Northwest Multiple Listing Service is a great resource for free monthly market reports and neighborhood-level real estate data. The website is available at NorthwestMLS.com. Most real estate agents in the Seattle area provide marketing materials, local property listings and other resources online. National websites, such as Zillow and Trulia, among others, are other good options.

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