As if the forest of cranes dotting the Seattle skyline weren’t evidence enough of the city’s transformation to a region on par with New York and San Francisco, real estate and financial insiders named Seattle the top real estate market in the U.S. in a new report from PwC.
Seattle lept to the top of the annual Emerging Trends in Real Estate report on the back of its strong roster of tech employers, educated workforce and vibrant recreational opportunities. Seattle broke Texas’ stranglehold on the top spot in the report as a city from the Lone Star State was number one each of the last three years.
To build the report, now in its 39th year, PwC interviewed 800 people in the real estate and finance industries and received survey responses from another 1,600.
Real estate pros rated Seattle, which is in the midst of an unprecedented building boom juiced by the rapid expansion of Amazon, as the number one development market and the number two investment market, behind only Salt Lake City.
There are plenty of cultural draws as well, according to the report. Seattle is among the top rated microbreweries with one per every 19,000 people, which still doesn’t seem like nearly enough. Seattle is also a top five culinary market, and 93 percent of residents have a park within walking distance.
Seattle, along with New York and Chicago, accounted for half of all new downtown office buildings in the U.S. in the past year, according to the report. And the construction boom is not just in the city, as the Seattle area was one of eight regions representing half of all suburb office buildings completed in the last year.
The report quantifies just how fast Seattle will grow as our largest employers continue to truck in people from all over the world. Close to 150,000 people are expected to move here over the next five years, or roughly the equivalent of Seattle’s neighbor to the east, Bellevue, or cities like Syracuse, N.Y. or Dayton, Ohio. And the city is getting younger all the time, with the population of 15- to 34-year-olds expected to rise 17.3 percent over the next five years.
These people are moving to Seattle work for homegrown tech giants like Amazon and Microsoft as well as the more than 100 out-of-town tech companies that have established engineering outposts here. A whopping 12 percent of workers are employed in a STEM job, according to the report, with 4.5 percent of people working in computer programming related occupations. Seattle is also churning out a lot of new ideas, with 6.63 patents awarded per 1,000 residents.
Rising populations are leading to problems for cities across the West Coast. Along with Seattle, cities like San Francisco, San Jose and Honolulu are facing affordability problems that could slow down growth. Even secondary areas on the West Coast like Sacramento and Orange County are struggling with affordability.
All the new people coming to town are also jamming up streets in places like Seattle, Portland and
San Francisco. Several West Coast markets identified new transportation projects as a top priority in the coming years.
As these issues have mounted, investors are looking down the road from major cities. This could lead to greater investment and development in places like Tacoma, Sacramento and the Inland Empire outside of Los Angeles.
“Emerging Trends interviewees have repeatedly mentioned the attractiveness of looking at investments in these markets that are adjacent to major markets in a region when the primary market becomes too competitive,” according to the report.