SEATTLE — If you’re among the thousands struggling with the high cost of housing in Seattle, here’s a statistic that might make you wince.
Census data show that in 2016, more than one-in-four Seattle homeowners owned their home outright, free from any mortgage debt. This lucky segment of Seattle households has grown at a remarkably fast pace. There were about 31,000 owner-occupied households with no mortgage in 2010. By 2016, the most recent data available, the number had jumped to almost 42,000, which pencils out to a 36 percent increase. That’s nearly seven times faster than the rate of growth for homeowners carrying a mortgage. The data show that Seattle has also outpaced most other big cities. Among the 50 most populous U.S. cities, Seattle ranks fifth for the increase in mortgage-free homeowners since 2010. That may seem counterintuitive. After all, Seattle has become one of the most expensive real-estate markets in the country. So what’s behind the increase in homeowners unencumbered by monthly mortgage payments here? One factor, certainly, is the massive baby boomer generation, now aging into retirement. This group, often defined as those born between 1946 and 1964, makes up a big chunk of Seattle homeowners _ more than 40 percent belong to this generation. It’s likely that many of these folks, after chipping away at their mortgages for many years, celebrated their final payment at some point this decade. Indeed, the data show that it’s primarily because of boomers that the number of mortgage-free households has swelled in Seattle. In 2016, when boomers were between the ages of 52 and 70, there were about 21,000 mortgage-free boomer-owned homes in Seattle. That represents a 43 percent increase from 2010, when fewer than 15,000 mortgage-free homes were owned by folks in that age group. Of course, just because you’ve paid off your mortgage by 65 doesn’t mean you’re living on easy street. There are still a lot of expenses associated with owning a home — we all know that property taxes keep going up — and wage income stops post-retirement. Census data show that more than a third of Seattle’s mortgage-free homeowners have a household income lower than $50,000. (There is a tax exemption program for Washington homeowners age 61 and older with income no higher than $40,000). Aging boomers aren’t the only reason that mortgage-free households have been on the rise in Seattle. In fact, nearly a quarter of these free and clear homeowners are younger than 55, the data show. According to ATTOM Data Solutions, a California-based real-estate data company, all-cash home purchases in the Seattle market nearly doubled in just three years, from 2010 to 2013, when these sales peaked at about 13,500. The number has dropped a little since then, but remains much higher than it was at the start of the decade. Matthew Gardner, chief economist with Windermere Real Estate, says that increase in all-cash buyers at first was due to investment purchases in the wake of the Great Recession. “The way I see it, cash purchases rose as the market was falling and investors started to snap up ‘cheap’ housing,” he said in an email. |
e-mail writer: gbalk@seattletimes.com |
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