Lennox Scott, chairman and CEO of John L. Scott Real Estate, gave the invocation and an update on the current real estate market as well as projections for 2016.
Three industry newsmakers, including Suzi Morris, senior vice president of Lowe Enterprises, Mark Gray, area president of Shea Homes Washington, and Jon Scholes, president and CEO of the Downtown Seattle Association made up the panel answering questions and new construction and development.
Hot topics for the panel included new residential construction, condo development, millennials, transit, and the new Housing Affordable Living Advisory Committee (HALA) recommendations regarding Mandatory Inclusionary Housing (MIH) and the Affordable Housing Impact Mitigation Program.
Scott kicked off the conversation with a positive real estate market forecast. “It will be another fantastic year for real estate in 2016,” he said. “People are talking about how sales are slowing down. We came off a frenzy market in the summer, but the market has not slowed down at all. Low inventory, strong job growth, and historically low interest rates are continuing to drive the market.”
The forecast is positive for new construction as well. Gray confirmed that he believes “the supply of new homes will continue to grow and be the vibrant market it was in 2006.”
With the median home price in King County at $480,000, it’s tough for first time homebuyers. The panelists were asked if there was a tipping point where builders say “this market is hot, but financially it’s not penciling out?”
“Consumers and homebuyers both get sick of costs going up,” said Gray. “Something has to be done about it but it won’t keep us from being in the marketplace. Whenever builders or manufacturers increase product offerings or add thing that are trendy, like granite, it adds cost.”
“As you underwrite deals you factor in escalation that will happen,” added Morris. “At some point something’s going to give. Rental rates and sales costs will make construction not cost effective. That point may come in a year or two.”
Industry leaders also have to figure out what people want, too. When it comes to millenials they think they know.
“They want walkability, whether it’s an urban village in Redmond, Kirkland, or downtown,” said Scholes. “They don’t want to be in their vehicles all day. That will continue to drive urban development.”
Morris believes quality of schools will be a major factor for younger buyers. “It should make the Seattle School District get their act together,” she said. “If not, millennials will move to suburban areas based on their proximity to work.”
Kellee Bradley is the PR manager at John L. Scott.