Industry News

News In Brief: March 2022

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  • The cost of living for an average U.S. family has gone up an extra $276 a month, according to The Wall Street Journal. As inflation rises, the price of groceries, gasoline and cars is making up all those costs. Overall household debt jumped by $1 trillion, the most since 2007, according to the Federal Reserve Bank of New York. Driving that debt in part are car and home loans, as car prices jumped up over 12%. Low supply and high demand are driving up car prices, but shoppers are still driving off with new cars and higher loans. The median home price is up nearly 20%. Credit card balances increased by $52 billion in the fourth quarter of 2021, the largest quarterly increase ever recorded.
  • With the national rate of Black homeownership no better than it was in the 1960s, a new local effort will look for ways to boost the number of Black homeowners in the Seattle area, according to the Seattle Times. JPMorgan Chase said it will direct $1.95 million toward a Black homeownership initiative organized by the Seattle Foundation’s Civic Commons. Exact uses of the money are still being determined, but the funds mark the beginning of a new effort to address a longstanding problem. The initiative will join several other efforts to increase Black homeownership in the region. In Washington, 34% of Black people own a home, compared to 68% of white people. In Seattle, the gap is about 26% to 51%, respectively. The new initiative aims to add 1,500 Black homeowners in South Seattle, South King County and Northern Pierce County in the next five years. The JPMorgan-funded initiative is not the first effort to narrow the homeownership gap in Washington. Another group of local housing and real estate industry experts has created a seven-point plan to boost Black homeownership. They call for more marketing and outreach to encourage Black homebuyers, counseling before and after purchase, more down payment assistance, more affordable housing and other proposals.
  • A Douglas County Superior Court judge struck down Washington’s new tax on capital gains, an initial blow to a major progressive victory that is expected to ultimately wind up before the state Supreme Court. In a written order, Douglas County Superior Court Judge Brian Huber wrote that the tax, among other things, violated the state constitution’s uniformity requirement for taxes. “It violates the uniformity requirement by imposing a 7% tax on an individual’s long-term capital gains exceeding $250,000,” Huber wrote, but imposes “zero tax on capital gains below that $250,000 threshold.” Huber – who was appointed by Democratic Gov. Jay Inslee in 2019 – also rejected the argument by Democratic lawmakers and others that the new law is an excise tax, rather than an income tax. Excise taxes have been considered constitutionally sound, whereas the state Supreme Court has rejected taxes on income as unconstitutional. The new law is “properly characterized as an income tax,” he wrote, and should also be considered a tax on property. In a recent statement, state Attorney General Bob Ferguson said he disagreed with the ruling and vowed to continue defending the law in the appeals process. The new law exempts a variety of assets, like retirement accounts, sales of real estate, timber, livestock, and certain agricultural properties, as well as some auto dealerships. Also exempted are sales of sole proprietor businesses that have gross revenues as high as $6 million. Both sides – as well as lawmakers – have generally expected appeals no matter the ruling, anticipating the case will eventually wind up before the state Supreme Court. If those justices uphold the new law, it could still potentially go to the ballot box as an initiative for voters to consider.
  • Six Washington-headquartered companies ranked among “America’s Best Employers” on Forbes’ 2022 list. Microsoft (No. 15), Costco (No. 17) and Alaska Airlines (No. 70) were among the top 100 large employers, as was Slalom Consulting (No. 53), a global business and tech consulting firm headquartered in Seattle. Redfin (No. 38) and Washington Federal Bank’s parent companyWaFd (No. 92) finished in the top 100 ranking of mid-size companies. The lists. released last week, were compiled from a survey of tens of thousands of workers conducted by Forbes and the German market research firm Statista. Respondents were also asked to rate their companies on factors such as working conditions, development opportunities and compensation.
  • Property tax bills will deliver tax hikes for King County homeowners ranging from 1.5% to 15%, depending on where they live according to the Seattle Times. Among those at the low end: Algona, Mercer Island and Shoreline. In the double-digits: Tukwila, Sammamish, Kent and Covington. Seattle homeowners will see an average increase of about 7%. Countywide, the average increase will be about 3%, which amounts to a third of the 9% jump in property values, according to King County Assessor John Wilson. That’s because voter-approved tax measures, such as school levies, are a bigger driver of property tax increases than rising values. More than half of property taxes collected this year in King County, 57%, will pay for K-12 schools, according to the assessor’s office. The county’s assessments also lag the housing market. The taxes King County will collect this year are based on assessed values in January 2021. King County home prices increased about 7% from 2019 to 2020 and 14% from 2020 to 2021, according to year-end data from the Northwest Multiple Listing Service. Around this time last year, King County property taxes increased by an average of 4%, with double-digit hikes in some areas. While most homeowners will see higher tax bills, the rate of property taxes will actually decline slightly because as values go up, the county can charge a lower tax rate to generate the same amount of revenue for schools, transit and other services. Seniors and some people with disabilities can apply for a reduction in their property taxes, although the county has been slow to process applications since the start of the pandemic and an expansion in who is eligible for the reduction. Find more information about those programs on the King County Assessor’s website. For King County property owners, the deadline to pay half of any taxes due arrives May 2. The second payment must be made by Oct. 31. Owners can appeal property assessments on the King County Assessor’s website.

  • Rent is on the rise and it’s more evident than ever after a Redfin report claims the average price rose 15.2 percent over the last year. The average asking rent price this January was reportedly $1,891, according to the report. Homebuyers are not excluded, as the national average mortgage payment climbed 25 percent to $1,595. Both are the biggest increases Redfin has ever reported. Seattle was not actually listed as a top 10 metro area with the fastest-rising rent. However, another Pacific Northwest city did make the list. Portland, listed as the No. 1 fastest-rising rent city, saw rents increase 39 percent over the last year. Austin, Texas, came in at No. 2, the other cities are on the eastern side of the country. Seattle is reported as having an average rent asking price of $2,774, a 30.9 percent increase over the last year. Monthly mortgage prices are at $3,010, a 24.3 percent increase. Kansas City, Missouri and Milwaukee were the only two top 50 who saw rent actually decrease. You can read the full report here.
  • As Washington lawmakers prepare to release their supplemental budget proposals, they received news the state revenue projections increased by more than $2.7 billion than originally expected through mid-2025, according to a report by the Seattle Times. Updated numbers by the Economic and Revenue Forecast Council show that projected revenue collections for the 2021-2023 budget cycle are more than $1.4 billion above what had been forecasted in November. And projections for the next two-year budget cycle that ends in mid-2025 increased by more than $1.3 billion. Revenues for the current budget cycle that ends mid-2023 are now projected to be nearly $61.7 billion. And projected revenues for the next two-year budget cycle that starts July 1, 2023 are projected to be nearly $64.5 billion. The next state revenue forecast will be in June.
  • The share of home buyers planning to move from one region to another has grown as many Americans look to relocate to more affordable regions of the U.S. Nearly one in three home buyers-or 32%-say they want to relocate, a record high, according to a new consumer survey conducted by Redfin. Remote work policies, new job opportunities, and ongoing shortages of affordable housing will likely keep Americans moving, economists say. Which markets are drawing the most interest among house hunters? Miami was the most popular migration destination of all major U.S. metros in January, according to Redfin’s analysis, followed by Phoenix; Tampa, Fla.; Sacramento, Calif.; Las Vegas; Cape Coral, Fla.; Dallas; San Antonio, Texas; North Port, Fla.; and Atlanta.
  • U.S. highway safety regulators are about to allow new high-tech headlights that can automatically tailor beams so they focus on dark areas of the road and don’t create glare for oncoming drivers. The National Highway Traffic Safety Administration says it issued a final rule allowing what’s called “adaptive driving beam headlights” on new vehicles. It will go into effect when published in the Federal Register in the next few days. The headlights, commonly used in Europe, have LED lamps that can focus beams on darkness such as the driver’s lane and areas along the roadside. They also lower the intensity of the light beams if there’s oncoming traffic. Camera sensors and computers help determine where the light should go. The new rule, which was supported by the auto industry, comes as the safety agency grapples with a dramatic rise in traffic deaths nationwide. Sam Abuelsamid, the principal mobility analyst for Guidehouse Research, said the new lights will show up in higher-cost luxury vehicles at first but will spread to more mainstream vehicles as the price of the technology falls.
  • The Washington Supreme Court has unanimously upheld a lower court’s ruling that rejected a fourth recall petition against Snohomish County Sheriff Adam Fortney. In a unanimous opinion Thursday, the court said Lori Shavlik’s allegations were all either insufficient or barred because they had been covered by previous recall petitions. The allegations included that he violated his duties by saying he would not enforce pandemic-related restrictions issued by Gov. Jay Inslee and by rehiring deputies previously fired for misconduct. The justices ordered Shavlik to pay legal costs Fortney incurred from her appeal of the lower court’s order.

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