An article in the Seattle Times highlights the efforts by British Columbia to throw a little water on the raging fire that is their housing market. The 15% tax on purchases by non-Canadian homebuyers has led a large number of cash-rich buyers to turn their eyes south of the border.
Seattle already has an impressive Pacific Rim population, so coupled with the tech employment buffet served out on both sides of Lake Washington, it was a natural landing point for many of the displaced buyers.
Seattle’s real estate had already experienced cash investors for several years, but it appears we are once again poised for an uptick in foreign investment.
This is good news for sellers who bought years ago on the rock solid belief their purchase would fund their retirement. Their patience was rewarded.
It is absolutely horrible news, as it was in Vancouver, for the middle class buyer or more specifically the young millenial with no existing real estate to parlay into something nicer. As the inventory continues to sludge into record lows, home ownership becomes an elusive mist for some.
But we are making America great again. Like him or hate him, the President is plowing forward on his campaign promises, so what does it mean for the housing market?
[takes out her crystal ball] I imagine that at some point, the immigration policies will either
- Preclude more tech imports, as the attempt to put Americans first gets pushed
- Provide homes where existing tech workers who may not yet be naturalized may sell
- Persuade large scale foreign investment to follow Hollywood to New Zealand.
All of these possibilities would move the needle closer to mid-point on the buyer/seller market scale.
To offset this potential efflux of foreign money and keep the market on the seller’s side, reinvestment by native born and naturalized citizens becomes more likely.
If Boeing Everett and Renton tool up for jobs currently off shored, Microsoft continues its Surface related massive resurgence and Amazon climbs even higher in its quest for global domination (wait, I think I have something in my shopping cart right now, which I need to buy immediately), I see little changing in supply and demand. The only relief would be the cash customer aspect of the bidding wars, which honestly for buyers, will be a huge relief.
So should you sell or buy? That’s the $740,000 question. If you need to sell, it is still a great time, and will probably continue that way for at least a year, although perhaps not as agressively as the last 2.
If you need to buy? You’re still fighting which will be a shortage for some time to come. If you have to buy, you can do so, but hunker in for a fight. Perhaps pack some power bars for extra protein.