I’ve been recently working with some clients to move out of their condo. Initially, they thought they would still have a few more years before moving out of their lovely two bedroom condo in Belltown. Subsequently, reality set in that it was going to be extremely hard to continue squeezing two adults, a home office, a future baby, and tons of stuff accumulated over the years into their 900 square foot living space. With the prices continuing to escalate for entry level single family houses near the city; they knew they would have to make it happen soon and get out of the perpetual “there might be something else better out there” search syndrome while they could still afford a bigger place.
They ultimately made the decision to put in an offer for a house in Fremont about a 5 minute drive away from Belltown. Some of the questions that I helped them grapple with included: which neighborhood is already liveable today but is also going to be an increasingly desirable area in the future with good room for price appreciation? I did a lot of analysis looking at the comps, potential job growth in the different areas, price per square foot trends, future traffic issues, etc. One tool that I used as part of their search was the Zillow heat map which is pretty useful to take a look at the overall price per square foot for the different neighborhoods. Here is the heat map for Seattle.
Not a surprise, Madison Park and all along the lake Washington Blvd area is showing mostly red (most highly valued) with properties valued in the $500-$700/ sq.ft range. Queen Anne is showing a high mix of yellow and orange with lower Queen Anne shifting to the red category.
I’m surprised that Zillow did not color code the Belltown/downtown and South Lake Union areas especially with so much recent news on new construction developments in the area. Many homebuyers will probably be curious about these spots and how they compare to other neighborhoods. Regardless, I think the map is a good tool to supplement detailed analysis and can serve as a nice starting point. I should probably mention accuracy is enough to get a ballpark feel (+/- 20%) but not something on which you’d exclusively make a sales or purchase decision. Nevertheless, it’s a great snapshot of the market in general and great to see relative differences across Seattle.
How should investor’s consider using the heat map? I’d recommend looking for yellow areas that are trending orange as good buying opportunities. The lime might be the best investment opportunities — perhaps for renting out a few years and selling thereafter (though resident investors may find lime a bit less liveable than other spots). Also, it might be helpful if your target area borders large areas of higher value (e.g. lime bordering yellow/orange). Ideally, your target neighborhoold has pixels of the higher-value color sprinkled throughout.
If you find such an area of interest, you’ll still need to find the right property at the right price and look at all the other factors that aren’t visible on the heat map. Nevertheless, at least you’ll know you’re fishing in the right pond.
Hope this helps!