The trend in deep-pocketed Californians looking at tech hubs other than Seattle could be a rare, albeit small, sign of relief for local homebuyers.
Seattle residents fed up with soaring housing prices may have to find a new scapegoat to blame the crisis on: It looks like the surge of San Francisco Bay Area transplants moving here to gobble up homes is fading fast.
Redfin reported Thursday that the number of Bay Area residents searching its site for homes in the Seattle area has dropped 45 percent compared to a year ago. It comes after the number of people exploring the Bay Area-to-Seattle move had quadrupled in the previous four years, intensifying long-running (and largely overblown) fears that wealthy techies and other Californians were coming here and plunking down huge cash sums to drive up prices across the Puget Sound region.
But now apparently Seattle isn’t the bargain that people in San Francisco and Silicon Valley once considered it to be, even though home prices here are still about half that of the Bay Area. Instead, Bay Area residents looking to flee the land of the million-dollar home are increasingly looking at other tech hubs, namely Austin, Denver, Boston and Washington, D.C.
Share of Bay Area home searchers who are looking at homes in Seattle
Where Bay Area home searchers are looking for homes this year
Bay Area: 76.9%
Southern California: 5%
All others: 6.6%
Nela Richardson, Redfin’s chief economist, said while other tech-heavy cities have various housing challenges, Seattle is the only one that has a brutal trifecta of problems working against it: soaring prices, lack of inventory and homes that sell too quickly for out-of-towners to tour. Basically, the homes here have already been picked over.
Still, anecdotal reports from across the region — including from two of Redfin’s own agents — suggest brokers on the ground haven’t seen the California migration slowdown hit Seattle just yet, as the company says the search data may be more of a predictor of things to come. And despite the big drop from last year, the share of Bay Area residents searching for Seattle homes is still at its second-highest point of the decade.
“I still get a lot of buyers from the Bay Area, mostly because a lot of the big companies in the Bay Area have auxiliary offices up here, such as Facebook and Google,” said Seattle Redfin agent Kyle Moss. “It still feels cheaper up here.”
The top search destinations for Bay Area movers remain, in order, Sacramento, Southern California, Seattle and then Portland. But Portland, which has complained of a similar rise in incoming Californians, saw a 21 percent drop in Bay Area home hunters in the past year, Redfin said.
As it was before, the hysteria over Bay Area techies moving to Seattle might be just a tad exaggerated. Even after narrowing down Bay Area residents to only those interested in moving, just 2.8 percent of those people are browsing houses in Seattle now, the Redfin data shows.
And in a typical year, about 3,650 people move from the Bay Area to King County, according to Census data. That would be enough to increase King County’s population by about a whopping 0.2 percent, except just as many people now take the opposite route, moving from the Seattle area to California.
But the stories of Bay Area families plopping down a million or more dollars, sometimes in cash, sometimes on houses sight unseen, are legion across Seattle and unlikely to stop anytime soon.
“Tech workers in a lot of these cities, right now they’re punching above their weight,” Richardson said. “Even though the numbers are small, the competition is real. And a lot of these buyers bring a higher capacity to outbid locals. In that sense, they are having an effect.”
One big caveat to the report: The data looks only at homebuyers and doesn’t capture people fleeing the Bay Area and renting in Seattle. So it’s unclear how the trend is impacting local rent prices, and whether some of those transplants could simply be waiting to buy in the coming years.
Moss says the hottest neighborhoods for people ditching the Bay Area are Capitol Hill — probably the Seattle neighborhood most similar to San Francisco — and anywhere else near downtown that is walkable, along with Lower Queen Anne and Fremont.
Given the continued growth in the Seattle tech scene, Richardson says she wouldn’t be surprised to see the number of Silicon Valley techies coming here shoot back up again soon.