Casey: Priced-out Seattleites braving commute to buy in nation’s hottest housing market
Seattle isn’t an option anymore. Millennials looking to enter the housing market for the first time have known this for a while. That’s why my wife and I (who are currently searching for a home) were so intrigued to learn that RedFin has declared Tacoma to be the hottest housing market in the country.
I grew up in – and adore – Tacoma. But is it a reasonable option for a young couple with jobs in Seattle? Is the market exploding down there because of other couples who are in the same boat as us? I wanted to find out.
In my inquiry I received this statement from Tacoma mayor Victoria Woodards:
As people are priced out of higher priced housing markets, many are drawn to Tacoma due to its relative affordability, and overall attractiveness as a place to live and raise a family, establish and grow a business, or simply enjoy world class art and other lifestyle amenities. The City of Tacoma, like others across the nation, has been working to tackle the challenges presented by accelerating housing market conditions. We’ve developed an action strategy to address housing affordability which includes the creation of new housing, keeping existing housing affordable and in good repair, helping community members stay in their current housing and reducing barriers for those who often encounter them.
A quick search on RedFin or Zillow will prove Tacoma’s relative affordability, and I can personally vouch for the city’s attractiveness as a place to live. But I wanted to know more about this “action strategy.”
I spoke with Daniel Murillo, Tacoma’s Housing Division Manager, who played in integral part in the concocting of this plan.
“All of it is designed in one way to both use the market that is going, and leverage the market development that is occurring but also provide additional opportunities through public investment projects that before simply would not have been possible because of the costs, etc. So it’s multifaceted.”
Murillo says that there are plans for more dense and affordable housing, but also no plans to halt single-family style development. He says that as the city expands, they also want to preserve some of the communities.
Hot Tacoma market
“Puget Sound Regional Council expects Tacoma to grow significantly over the next several years. So we need to be prepared for that, and so how do we work within our communities to provide those opportunities?”
But who is moving into these Tacoma neighborhoods? Is it Seattleites like me who are priced out of Washington’s biggest city? Real estate broker Auston Hilkin says yes.
“Actually, the last three or four sales that I’ve done in the Tacoma and Gig Harbor area have been in that situation where the buyers work in Seattle. They’re getting to that age where it’s time to buy a home, and their finances are getting to the right spot, and they’re tired of paying someone else’s mortgage. And that’s what they’re doing. They want to start investing in themselves.”
He’s referring to millennials; young adults who have outgrown their small apartments in trendy Seattle neighborhoods. They’ve gotten married and are ready to make the next big steps in their lives. Not to mention that now is a good time to buy a home. Just not in Seattle.
“Interest rates are at an all-time low right now after the past year,” Hilkin said. “A first-time home buyer who has a good credit score and is able to put 10-15 percent down on a home, they’re looking at an interest rate of 4.2-4.4 percent and that’s almost a full point from where it was. The buying power in that aspect will help the first-time home buyers increase a lot. They’re able to look at a wider span of homes than they were so I think a lot of people are trying to take advantage of that.”
Hilkin says that there is some truth to the RedFin study about the market in Tacoma, and he is seeing it first-hand.
“I do think it’s very hot right now. People who have these jobs, they’re trying to look for the next best place to live and it looks like Tacoma is that right now. It has a similar city feel. I think the North End is really popular right now and it’s also close to freeways and for a commuter it’s very accessible. They get up really early in the morning and they try to leave Seattle by 2:30 or 3pm at the latest and they’re still going to hit traffic, which is inevitable.”
Tacoma checks off many of the boxes that my wife and I desire for our first home. It’s a beautiful area with lovely homes, it has a great nightlife with a big city feel, it is in our price-range, and I even have family nearby. The only real downside that we foresee is that commute. Some millennials may be willing to take the Sounder train every day, but others will have to brave some pretty horrific traffic. The bottleneck at the Tacoma Dome going both directions, Southbound through Federal Way and Fife, and endless construction pose some serious problems.
Braving that commute
I wanted to know if WSDOT has anything planned to help deal with this new influx of commuters who are making a daily pilgrimage to Seattle from down South. Public Information Officer Cara Mitchell told me that some of the projects that are currently underway will help ease the congestion.
“Construction at I-5 and State Route 16 should be finishing up later this summer,” Mitchell said. “The final fully funded HOV projects that builds the Southbound I-5 Puyallup River Bridge and the connecting HOV lane there. That will be finished in 2021 and it started in February of this year. They’ve removed the L St. overpass to widen I-5, add an auxiliary lane. So more capacity in the Northbound direction between I-705 and SR 167 and an additional HOV lane in that direction also.”
The Link Light Rail connecting Seattle to Tacoma at the Dome is also projected to be operating by 2030. But in the meantime, Mitchell says that there aren’t any new plans in the works to mitigate the new wave of Tacomans.
“We can’t control the number of people that move to Pierce County. It’s a great place to live. But these projects that are currently underway were funded by the state Legislature several years ago. So this is the final one that we have for HOV. To get the HOV option up and running and finally connected in Pierce County.”
Tacoma really has a lot to offer and for a reasonable price. But is it worth it for millennials who have been priced out of Seattle? It seems like many of us are saying yes. But as for my wife and I, jury is still out. This is one of the biggest decisions we will ever make, and we want to make sure we make the right one.