Belltown is named for William Nathaniel Bell, one of the original settlers whose heavily forested land became downtown Seattle. The Belltown/Downtown area is where many Seattle landmarks like Pike Place Market and Smith Tower are found. Fortune 500 companies Nordstrom and Expeditors International are headquartered here. Among the many ongoing projects downtown, work began in June 2015 to lay the foundation for Weyerhaeuser’s new headquarters in Pioneer Square, to be opened in 2016; and the Pioneer Building on First Avenue has been purchased for redevelopment as co-working space and suites for small businesses and entrepreneurs. The pioneers’ clapboard houses are long gone and virtually all recorded sales are now of mid-rise and high-rise condominiums in this vibrant, 21st century city.
The year 2015 saw extraordinary shifts in demand relative to supply in this part of Seattle. After two years of a balanced market tending to favor sellers, in 2015 the inventory of homes for sale plunged from four months in January to less than two weeks in July, recovering to two-and-a-half months by October.
Sale prices in Belltown and Downtown Seattle ended with the highest year-over- year price gains observed—nearly nine times the advance seen in 2014. Prices turned higher in the winter, then spiked upward in the late summer before ending 2015 just under $600,000.
Research from Realogics Sotheby’s International Realty published in June 2015 predicted the explosive median home price increases seen in this area given the new construction deliveries of luxury condominium towers, which explain the market value spike— presales had been incubating for several years before delivery of the south tower of Insignia. We expect a steady and growing supply of new condominiums in response to demand that will keep the median price rising. Rents in new apartment buildings can range upwards of $4.00 monthly per square foot, and the buy vs. rent analysis suggests that headroom remains for further home price increases.