By Julian White-Davis, Photo Editor
Vashon Island has been a sought-after place to live for decades. However, in recent years, the real estate market has exploded as more and more people have scrambled to claim land on the rural island.
“When it comes to how good the market is, Seattle is on fire, and Vashon is very hot. That’s how I would characterize it,” said principal broker Ken Zaglin at his John L. Scott office on Vashon.
The market is doing so well right now because there are a lot of people who want land in Seattle but can’t afford it or can’t find any, so they look to Vashon instead.
“Employment is sky-high [in Seattle]. You’ve got Amazon, Microsoft, all of the software developers, [and] all the game developers,” said Zaglin. “The employment picture in Seattle is extremely robust, so the number of people who are physically moving there have [more money].”
These wealthy employees in Seattle overflow onto Vashon and fill up the real estate markets. The competition makes selling property very easy, but it causes problems for buyers looking for affordable housing.
Zaglin paints a picture of a common scenario for people who are looking to buy on Vashon.
“You’re a buyer, and you’re buying your very first piece of property, and you’ve got a decent job, and you now meet the absolute minimum requirements to qualify for a [government backed] VA or an FHA loan,” said Zaglin.
“You walk away from that banker feeling great. ‘I’ve got a good job, I’m making just enough money, I can finally buy a house.’ You go to make an offer for something that’s just got on the market. But now there’s five other offers. Some of them are in cash, and so your offer isn’t even considered.”
The wealthy from the tech industry are buying the houses on Vashon at high prices and making it impossible for working-class people to find affordable housing. There simply aren’t enough houses on Vashon’s 37 square miles to accommodate everyone.
The rental market is similar to the buying market on the Island and in Seattle right now.
“Rentals have gone sky high in terms of price,” said managing broker Connie Sorensen at the West Seattle Windermere office. “There is minimal inventory and availability.”
A major cause for this unavailability of housing in the area was the recession in 2008. The market is still recovering.
Right before the downturn, people bought housing as investments because the real estate market was doing so well. However, when the stock market crashed, people thought they would lose value in their investments.
They panicked.
“Those properties that were obtained as investment properties [before the recession] were either lost or sold,” said Sorensen.
People are just now getting more comfortable investing in real estate again.
“From 2007 to 2011, the market was really terrible, and a lot of [realtors] were hurting very very badly,” said Zaglin. “But since 2011, the market has been very steadily recovering, and we’ve now gotten past that almost depression-like period and even appreciating higher.”
The number of people looking for housing right now has also been bolstered by low interest rates.
“Interest rates are at historic lows,” said Zaglin, “so that makes housing relatively affordable. There were times twenty years ago where it was 18 percent to borrow money, and today you can get a loan for three and a half percent. So that makes the cost of money very inexpensive.”
Because it’s so easy to get loans with low interest rates, people now have a more affordable way to buy real estate.
While it’s difficult to predict precisely what will happen, it seems likely that the market will tip towards stability in the coming years. As the old saying goes, what goes up must come down.
“At least in 2018 we might be seeing a little more of a balanced market,” said Sorensen.
