Bellevue, Wash., get ready to experience the Amazon effect.
With the tech giant possibly cooling on Seattle and focusing its regional growth plans on the nearby city across Lake Washington, tech-powered real estate company Redfin predicts Amazon could set off a “real estate frenzy” in Bellevue. Already a more expensive city than Seattle, Bellevue could soon become inundated by younger buyers looking to live close to work, Redfin says, in addition to the well-heeled families that already like the city for its top-notch schools, mix of suburban and urban style and proximity to the mountains.
Like the region as a whole, Bellevue’s housing market has cooled in recent months, with home prices dropping 6.2 percent in January over the prior year. However, there are signs that the downturn in the local housing market may only be a short-term blip, and with Amazon coming to town things could heat up fast.
For years, Amazon has grown rapidly in its hometown of Seattle, providing thousands of high-paying jobs that attract top talent from around the globe. Amazon’s rise has put pressure on the city, pushing Seattle to the title of the nation’s hottest housing market for nearly two years, and leading to plenty of growing pains.
Amazon is just beginning to grow in Bellevue, the company’s original birthplace, so Redfin doesn’t have hard data on its influence yet. However, Redfin identifies a couple of trends to look out for: Increased Millennial home ownership in Bellevue and other surrounding suburbs, teardowns to accommodate new construction, and existing homeowners moving up while holding on to and renting out their old homes.
“As employees from Amazon and other large tech companies move over to the Eastside, whether their job is moving to Bellevue or they’re planning to commute across the lake to work in South Lake Union, they’re creating a whole new cohort of buyers who are looking for something different in a home,” Redfin agent Kathi Kelly-Billings said. “They don’t want their parents’ or grandparents’ house. They want new, modern construction. Because Bellevue has such a scarcity of land, I expect we’ll see a lot of teardowns in the coming years, replaced with modern, high-tech homes.”
Bellevue has long been home to a big contingent of techies working at companies like Microsoft, Expedia and T-Mobile. But the city has blossomed into an even larger tech hub with giants like Facebook and Google, in addition to Amazon, all planting their flags in Bellevue just in the last few months.
- Amazon has already leased a triumvirate of office buildings in Bellevue totaling more than 1 million square, and it is looking for more. The tech giant has already secured enough space for roughly 7,000 employees. Amazon recently put a high-profile Seattle office project on the sublease market, signaling plans to scale back growth in its hometown.
- Facebook leased space in a pair of buildings in downtown Bellevue last year totaling 85,000 square feet and followed that up by taking a new 338,000-square-foot building under construction in the massive Spring District project. It is also building out a huge footprint of lab space in nearby Redmond, including a new centerpiece office building that previously went under the moniker of Building X.
- Google has long had a presence on the Eastside with its Kirkland campus, but it made its entrance to Bellevue with a 80,000-square-foot lease at a building called One Twelfth @ Twelfth, with plans to lease another 30,000 square feet.
Bellevue sports an already sky-high median home sale price of $858,000 — versus $630,000 in the city of Seattle. The influx of tech giants is sure to keep those prices rising, even if the market as a whole doesn’t bounce back.
“Microsoft and Amazon are staying put, which helps create a real estate market on the Eastside that can withstand other fluctuating conditions,” Kelly-Billings said.