Prices for buying and renting in San Francisco have gotten out of hand. It is to the point where very few people can afford to live there, and many are choosing not to live there any longer. Many San Francisco residents are packing up and heading for other cities like Austin, Texas, Portland, Ore., and Seattle, Wash. Only, there is a bit of a problem with packing up and heading to the latter city.
Upon arriving, former residents of San Francisco may look around and enjoy the techie culture, artisan coffee houses, and general vibe of Seattle and feel at home. But upon searching for a place to live, they might notice some similarities they weren’t expecting; high home prices, low inventory, and bidding wars.
As The Wall Street Journal reports, home-sale prices rose 9.5 percent from 2014 to 2015 in the Seattle area bringing the median home value up to $385,300. While that is still a far cry from San Francisco’s $781,600 median, Seattle buyers looking to purchase a good home in a desirable neighborhood will most likely need a jumbo mortgage.
While San Francisco saw its home prices drop for the first time in four years recently, Seattle’s home prices show no signs of slowing down and the belt looks like it will only tighten further on the inventory for the city. Before the recession, a Seattle home would take about four to six months to sell. Now, it doesn’t take more than a month. And in that month some homes have had as many as 13 offers and sold for 10 percent, 20 percent, and even 30 percent above asking price.
When it comes to jumbo mortgages, Seattle is only second to San Francisco. From 2014 to 2015, Bank of America saw an increase of 20 percent in the company’s jumbo lending volume in Seattle.