The share of Seattle-area homes purchased by investors has grown steadily over the past two decades, from 3% in 2000 to 9% this fall, according to a recent Redfin report. Investors account for 6-29% of all home sales.
Washington isn’t the only state seeing this trend. Investors across the country are looking to cash in on skyrocketing house prices and rents, putting them in competition with new buyers trying to work their way to homeownership.
Nationally, investors bought a record 18% of homes sold in the third quarter of this year, and they are increasingly turning to single-family homes, according to Redfin.
“Investors looking to buy homes will confront people who want to live in them,” said Daryl Fairweather, chief economist at Redfin.
However, investors alone cannot explain Seattle’s increasingly inaccessible housing market. Individual buyers with cash from stocks or the sale of their last home lead to bargaining, sometimes with full-cash bids.
“We don’t have enough housing and there are a lot of people working here who make a lot of money,” said Gregg Colburn, an assistant professor at the University of Washington. “To a certain extent, we created our own problem.”
The region is facing a shortage of homes to buy and rent, and thousands of low-wage workers travel more than 25 miles to Seattle. The report noted that between 2005 and 2019, Seattle generated over 169,000 new jobs and only about 84,000 housing units.
Seattle home prices have risen nearly 70% since 2016. Rent prices in the metro area have grown by 23% in five years. Meanwhile, Washington, D.C. has seen one of the most significant increases in homelessness in the country.