Houses and Jobs
Home prices are soaring in the Puget Sound region as the buying spree, which pushed the homeownership rate to 64.1 percent in 2004, has continued into 2005. Buyers hoping to beat rising interest rates are depleting inventory faster than the market can replenish it. By the end of the first quarter, listings in King County (home to Seattle) were down 30 percent from one year earlier, while inventory in Snohomish and Pierce counties dropped 23 percent and 7 percent, respectively. Properties are receiving multiple offers, especially in hot spots such as Queen Anne, Downtown/Hills, and Bellevue. With so many hungry buyers, the median home price in King County recently reached $325,000, up 16 percent from last year.
Although Pierce County is still the most affordable area, it saw the largest jump in home prices, rising 17 percent from last year to $220,000. Although these elevated prices are bad news for would-be homebuyers, the apartment market should benefit from stable demand as many residents are forced to remain renters.
The economic recovery that began in the Puget Sound region last year continues to gain momentum. Boosted by gains in professional and business services, the employment base is forecast to expand by 2.9 percent in 2005. The manufacturing sector, which has suffered greatly in recent years, appears to have stabilized. Boeing, the region's top employer, has begun hiring again after reducing its workforce by nearly 40 percent.
In addition, the information sector is adding to the region's economic strength with a number of technology companies expanding here. For example, Microsoft announced plans to hire 3,000 local workers and increase its research and development spending by 4 percent this fiscal year, while Google recently opened a new development branch with space for at least 200 employees in Kirkland.
One area of concern, however, is the fallout from Cingular's acquisition of AT&T Wireless. The newly combined company plans to slash 10 percent of its national workforce this year, and already about 700 positions have been eliminated at AT&T's former Redmond, Wash., headquarters. Still, though the cuts are a setback for the local telecommunications industry, they are not expected to disrupt the region's overall economic recovery.