Agent: Long-Range Housing Plans Necessary for the Puget Sound Region

King County is expected to increase by 1.7 million people and 1.2 million jobs in the coming 30 years according to the Puget Sound Regional Council’s Vision 2040. PSRC describes its purpose on its website as a “mission to ensure a thriving central Puget Sound now and into the future through planning for regional transportation, growth management and economic development.”

New construction is sometimes overlooked in published statistical reports. But, new construction will determine the economic well being of communities.

To meet the growth, cities must pay close attention to new construction. According to Northwest Multiple Listing Service data, new construction numbers for King County have held steady in the last six months. Sales are up over 40 percent. But, compared to last year at this time, sales are down 46 percent. Confusing?

Lower interest rates and inventory are some of the reasons that surface in the data. But, one new development sets the standard for quality construction, which leads to a high volume of sales. Tom Covello, a Realtor with Windermere in Issaquah, has a positive view of the new construction market in Sammamish.

Covello represents the Murray Franklin development of Laurel Hill.  Opening only 16 weeks ago, Laurel Hill already has 12 firm sales and five others in negotiation. Prices range from $675,000 to $800,000. “I have not seen a big dip in prices on the Eastside and feel that we are looking at a relatively stable market. One indication of this is that builders are not giving incentives such as upgraded materials to buyers that were previously common in the industry. The only thing that builders are offering is reduced interest rates based on their association with specific lenders,” he said. “Murray Franklin is being firm on pricing.”

Maple Valley has seen a surge in new construction. The majority of these homes fall between the mid $200,000 and the mid $300,000, which make them appealing to the first-time buyer. Inventory has decreased 50 percent from January through June. Sales and pending statistics have increased over 100 percent.

Other areas have not been as productive.

North Bend has experienced a major slowdown. Using Multiple Listing Service data, North Bend is reporting over 11 months of inventory of new construction. 

George Orren, also a Windermere Issaquah Realtor, has represented builders for over 15 years, most recently in the North Bend area.  

When asked the demographics of the buyers that he worked with, he stated: “Many of our buyers were relocating from other states. They had already sold their homes and had the cash to invest in a new home. The builders I worked with were offering financing incentives that made new construction more appealing than existing residential properties, but we still did not generate the number of sales that builders expected.”

David Hoffman, King County Manager for Government Affairs and Public Policy for the Master Builders Association, has not seen a decline in builder members. What concerns him is the decline in sub-contractors. “With over 40 percent of sub-contractors leaving the area, builders will have a hard time meeting future demand,” he said.

He is concerned about what that will do to the price of homes. “There is no way current housing stock, including new construction will meet demand if the estimated population and job growth is accurate.”

With the current uncertainty in the housing market, it is a great time for cities to plan for job growth and where housing should be built to minimize transportation problems. Issaquah and Shoreline are stepping up with a major rehabilitation of their core areas. Other cities should follow their lead to make sure new construction is part of a cohesive plan for developing and maintaining a healthy environment.

Joan Probala is the managing broker for Issaquah Windermere (Windermere Real Estate/East Inc.). She has 30 years of experience in real estate, construction and sales. Her previous real estate columns for Sammamish Patch can be found .