Apr 8, 2024 - News

Why Seattle's young families can't find big houses

Share of ownership of large homes by generation and market
Data: Redfin; Chart: Axios Visuals

Empty nesters own one-quarter of family-size homes in the tight Seattle market, slightly lower than the 28% national share, according to a recent Redfin report.

Why it matters: Seattle has a well-documented housing shortage and affordability crisis, with sky-high interest rates putting home ownership out of reach for many millennials without help from family.

State of play: The problem for many younger families is that baby boomers don't have much motivation to sell, according to Redfin senior economist Sheharyar Bokhari.

  • Boomers typically have low housing costs and are mortgage-free or holding great low-rate mortgages.
  • In addition, many are "still young enough that they can take care of themselves and their home without help," Bokhari said in the report.
  • Still, boomer wealth isn't evenly distributed, Axios' Megan Rose Dickey reports, as an estimated 17 million people over 65 are considered economically insecure, according to the National Council on Aging.

What they're saying: Seattle, along with other expensive coastal cities, is among the areas most affected by "rate lock" — in which homeowners are loath to give up existing homes and low-rate mortgages, said Zillow senior economist Nicole Bachaud.

  • Only 5% percent of Seattle homeowners are considered "free" from rate lock, per Bachaud.

The big picture: Nationally, homeowners are holding on to their homes nearly twice as long as they did in 2005, Redfin research shows, and many are planning to age in place.

  • But many seniors are still downsizing, sometimes to luxury apartments.
  • Of 1,020 boomers Opendoor surveyed nationwide who plan to sell their home, 85% said they intend to do so in the next three years.

Yes, but: The lower rate of boomers in big houses in King and Snohomish Counties, compared to the rest of the U.S., could be related to our region's high tax burden, John Manning, managing broker for Re/Max Gateway in Seattle, told Axios.

  • Seattle's homeowner demographics have changed with the influx of thousands of young tech workers, he said.
  • At the same time, older homeowners may feel they need to move as they face "rampant increases" in property taxes along with inflation, Manning said.

What's next: Many young families are renting single-family houses.


Related:
America's homebuyers are getting older

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