When I wrote recently that Bellevue had become more expensive than Manhattan, I noted that the city of Eastside still lags behind the king of insane and unaffordable real estate, San Francisco. But a local agent suggested it might just be a matter of time.
“We expect that latest record to fall this summer, with Bellevue claiming the absolute top spot as America’s most expensive city,” predicted Cary Porter, an Issaquah-based agent for The Cascade Team.
Well, it didn’t take long.
Things are so frothy in Bellevue right now that the median price of all homes and condos has jumped another $190,000 since December.
It’s now $1.56 million – leaving even San Francisco in its glittering dust, according to January data released by brokerage firm Redfin last week.
Among cities with populations over 100,000, Sunnyvale in Silicon Valley is still No. 1 — at $1.69 million in January. But Bellevue is fast approaching that.
I emphasize this again because what we are witnessing at Bellevue is a shock event that only happens once in a generation. It’s not just a show of money and something to ogle, although it’s definitely that. It also has the potential to reshape the demographics, culture, and politics of the Seattle area.
Case in point: At the Bellevue City Council meeting on Monday, a tech guy named Jason Rock came up to report that even he and his wife, both “wealthy, well-paid tech workers,” didn’t make it. to get by in the city’s housing market. . So they were pushed back to a less rarefied place.
“We were effectively kicked out of Bellevue,” where he works, he said. “As a result, we bought a townhouse in Columbia City, Seattle. This lack of affordable housing in Bellevue has locked me into a fairly substantial commute.
Do you see what is happening here? Seattle is becoming the new dorm community of its old dorm community.
This historic reversal is driven by huge and sudden price changes. A year ago, in January 2021, homes in Bellevue were more expensive than homes in Seattle, but only by $165,000, or about 20% more. Now the Bellevue rocket costs $825,000 more, a premium of 113% over Seattle.
This means you can now buy of them mid-priced homes in Seattle for the price of one in Bellevue — and there’s still a hundred thousand dollars left (enough to buy a new Tesla Model X for your drive to the Eastside).
Not so long ago, Seattle was the center of gravity. Now we are a cheap place in New Bellevue to sleep.
Here’s a prediction: This real estate gold rush will radicalize Bellevue’s once bland politics.
In the not-too-distant future, I bet a call familiar to Seattleites will ring out in the Eastside as well: tax Amazon.
Have you seen Seattle’s progressive payroll tax on top earners at big corporations work? In its first year, it raised $231 million, which is $31 million more than expected. That means the tax hasn’t driven big business out of town, not yet, as so many critics had incorrectly predicted.
Specifically in this article, most of this money will be used to pay for desperately needed affordable housing in Seattle.
But Bellevue has a more desperate need for affordable housing. Although it’s now one of the most expensive cities in America, one-fifth of Bellevue households are low-income (meaning, according to the city, they earn less than $40,000 a year, or 57 $000 for a family of four).
Where will they continue to live? Homes are out of reach, and the median apartment rent there is close to $30,000 a year.
Bellevue imposed a 0.1% sales tax on homes a year ago to try to address this problem. It is, however, a regressive tax that hits low-income people the hardest as a slice of their income. The biggest problem is that it only brings in about $9 million a year – enough to build about 30 new affordable homes a year, in a growing city of 152,000 people.
So the sales tax both hits the poor and isn’t close enough; meanwhile, technological wealth is skyrocketing. It’s an old debate in Seattle, but mark it: cries of “taxing the rich” will be an inevitable echo of this Bellevue boom.
Unless everyone just leaves Bellevue to the rich, which seems possible. It also makes me curious that when teachers, artists, carpenters and the like are put on a bounty, they often energize a city of overflow. Remember when everyone in Seattle was supposed to move to Burien, turning it into a hipster paradise?
Maybe Bothell will be the Burien of Bellevue. Or it could be that the next “it” city for those displaced by the tech bomb is somewhere more unexpected, like, say, Monroe. I could see Monroe, a population of 18,000, catch fire in the Bellevue blast zone. New motto: It’s not just a prison anymore.
Bellevue is definitely the place to watch in 2022. That’s about all we can do — no one can afford to move there anymore.