Economist: Boeing contract will have big impact on housing in Western Washington

The new Boeing contract will likely boost housing demand by increasing incomes and job security for machinists, providing a positive outlook for long-term income and job growth in the region, a local economist told KIRO Newsradio.

Appearing on “Seattle’s Morning News,” Windermere principal economist Jeff Tucker said despite the strike, there was no clear indication of softening home prices or buying demand.

“Settling the strike at Boeing is definitely a tailwind for housing demand in the region,” Tucker said. “It’s boosting incomes for the machinists there at Boeing, and it’s giving some more certainty about that kind of long-run income and job growth for the region.”

Despite the strike, home prices remained stable.

“I don’t think that we saw a clear signal of softening of home prices or home buying demand during the strike,” Tucker noted. He added that the Seattle metro area’s unemployment rate is about half a point higher than the national average, partly due to the strike’s impact on the labor market.

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Home prices continue to rise as mortgage rates fall

Improved mortgage affordability in October led to an increase in listings and lower mortgage rates compared to the previous year. King, Pierce and Snohomish Counties experienced notable home price increases, with King County up 8%, Snohomish County up 7.5% and Pierce County nearly 10%.

“The upsurge in activity all around the region and even in the Seattle MSA (Metropolitan Statistical Area) was striking,” Tucker said. “Buyers had more options to choose from, and they did have somewhat lower mortgage rates, especially compared to this time last year.”

San Juan County, with a median home price of $1.1 million, saw fluctuations influenced by its small market size and ferry commute challenges.

“In October, we saw a grand total of 19 closed home sales this year versus 21 last year,” Tucker explained. “It’s really almost kind of just a roll of the dice of who happens to be selling that home.”

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Light rail, Boeing contract impacts housing

The new light rail extension has spurred demand and development, attracting both residents and investors.

“The opening of light rail stations is a major amenity that is attracting more demand and more interest,” Tucker stated. “It’s filling up those parking lots in that area pretty much every day.”

Seattle is also considering changes to its design review process to expedite housing development.

“The city is taking public comments on whether to exempt more buildings from design review,” Tucker said. “There are sort of a whole series of layers of vetoes that keep sending a builder and their architect back to the drawing board again and again.”

The city’s efforts include potentially expanding the floor area ratio ceiling to facilitate the construction of townhomes and other multi-family housing options.

“This was a big step forward for missing middle housing,” Tucker concluded. “Especially maybe duplexes, townhomes, fourplexes on previously single-family homes throughout the city.”

The new light rail extension has attracted demand and development, drawing interest from both residents and investors. Seattle is also considering changes to its design review process to expedite housing development, aiming to address the region’s growing demand for homes. The city is taking public comments on exempting more buildings from design review and expanding the floor area ratio ceiling to facilitate the construction of multi-family housing options.

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X and email him here.