Economist: Things continue to get ‘worse’ for first-time home buyers in King County

Nov 6, 2021, 2:03 PM | Updated: Nov 8, 2021, 8:02 am

Puget Sound housing prices, first time home buyers...

(Getty Images)

(Getty Images)

With steadily rising housing prices across the Puget Sound region, first-time home buyers are finding themselves on the outside looking in.

‘Significant obstacles’ remain for homebuyers in the Puget Sound region

“It’s very, very hard for a first time buyer here in King County,” Windermere Chief Economist Matthew Gardner told KIRO Radio’s Dave Ross, describing a situation that’s gradually become “worse” for younger home-buyers.

Comparing median wages in the region, age demographics, and the average price of housing in the area, Gardner found that just 4% of homes in King County are affordable for someone looking to purchase their first house.

“That is a remarkably low number,” he noted.

That’s being driven by a couple factors. First, “wages are rising, but not at the pace we’ve seen home prices go up at the same time,” Gardner says. Second, mortgage rates have also begun to increase, making the price of financing a new home that much more unattainable.

There’s a third issue at play beyond just money, too.

“A lot of those first-time buyers are impacted because of the work-from-home scenario,” Gardner said. “Many of them are renting downtown, let’s say in South Lake Union, to be close to Amazon, for example. Well, they are going to want to buy a home, but they are almost precluded because of the need to be close to their offices.”

Home office space is now ‘very high on people’s list of requirements’

A rise in virtual work in the wake of the pandemic has certainly helped, but as Gardner points out, many employers haven’t yet decided on whether that will be a permanent situation.

“They’re just basically in a holding pattern right now,” he said. “It’s quite likely, I think, that come next spring when we get more clarity about it, we could see a big push in terms of new demand of people saying, ‘OK, well now I know where I can live.'”

“We could see even more demand coming from those younger buyers once they get clarity on where and how often they have to come to the office,” he added.

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Economist: Things continue to get ‘worse’ for first-time home buyers in King County