Whether or not a Vancouver tax may accelerated Seattle’s housing market has become a topic of debate in the real estate world.
Vancouver, B.C. passed a foreign buyers tax after their real estate market dropped more than 20 percent in three months—and they suspected absentee owners buying investment properties was partially to blame. Within two months, internet searches from China for Seattle real estate jumped by more than 140 percent.
By the end of 2016, the CBC reports, about half of luxury homes sold in the Seattle and Bellevue area were to foreign buyers—up from a third the previous year.
Meanwhile, real estate listing site Zillow says that the data remains inconclusive. For their own part, Zillow hasn’t found an uptick in traffic from Chinese home buyers since implementation of the tax—just the usual spikes from events like Lunar New Year.
Regardless, the CBC report notes that our local realtors are adapting to a new real estate environment.
Realtors are customizing publications, establishing concierge services, and taking basic language lessons to respond to clients who have a different culture, style, financial situation, and expectations. This may also be an opportunity for enablers like improved virtual reality tours and other online services.
From inside Seattle, the city and the region look unaffordable, relative to our local history. From outside Seattle, we look inexpensive compared to Vancouver, B.C. and San Francisco.
There were some doubts about whether the influx of Chinese buyers in Seattle would be small or temporary, but Bloomberg and the Wall Street Journal are now reporting on the trend. It affects both Seattle and Bellevue—both with job opportunities, schools, and established, growing Asian communities, all appealing to prospective buyers.
There is an expectation that our affordability will continue to be appealing because tax laws take longer to change in the U.S. As long as that market differential exists, there will be a demand for our supply. More demand from buyers who can afford to bid up prices with no extra increase in supply suggests our region’s housing prices may be accelerating just as some were seeing signs of slowing.
Because sales aren’t categorized by the source of the funds, and because it is relatively easy to make purchases through intermediaries, it may be difficult to find quantifiable measures of the influence. Until then, anecdotes will rule.
This article has been updated since its original publication to include conflicting data from the CBC report.
- 'This is Vancouver deja-vu': How Seattle's housing market is making way for foreign buyers [CBC]
- Tax Relief: The (Non)Impact of Vancouver's Real Estate Tax on the Seattle Market [Zillow]
- What will Vancouver's housing market implosion do to Seattle? [CS]
- Vancouver's home sales down 33 percent as Seattle looks more appealing [CS]
- Vancouver's real estate tax won’t affect Seattle, says Zillow [CS]
- Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes [Bloomberg]
- For Chinese Home Buyers, Seattle Is the New Vancouver [WSJ]
- Vancouver tax driving Chinese buyers to Seattle (and Bellevue) [CS]
- Seattle isn’t as diverse as you might think it is [CS]