The ability to work from home has folks from Seattle, King County moving to Pierce County
Eric Fischer, 29, and Asia Campbell, 25, lived in a 700-square-foot Seattle apartment when the COVID-19 pandemic began last year.
The couple, both teachers in the Kent School District, began to feel the smallness of their apartment while teaching from home.
“I teach P.E., and it can get loud,” Campbell said.
They had been considering a house in the future, but quarantine hurried the process along.
“It wasn’t a big deal to be cooped up together when we both went to work,” Campbell said. ” And you know, hearing the city noises all day long for 12 hours of your day versus three hours is a lot.”
“Quarantine gave us that free time to slow down and start looking at places,” Fischer said.
Campbell and Fischer decided to leave Seattle for a 1,600-square-foot home in Tehaleh. The development in East Pierce County wasn’t on their radar, but the price caught their attention.
“It’s so much cheaper than trying to find a home up there,” he said.
Pierce County developers say people working from home during the coronavirus pandemic has led to a surge in the county’s already hot housing market.
Home buyers from tech companies like Amazon and Microsoft have begun to buy property in Tehaleh, a 475-acre development roughly between Orting and Bonney Lake.
One Tehaleh developer, Newland Communities, said Seattle tech workers were never its intended target audience, but working from home has brought migration from Bellevue, Redmond and Seattle to Pierce County.
“We were not trying to specifically go after the Amazon/Microsoft buyer, because we just didn’t think they’d come down that far,” marketing director Marita Ledesma said. “Now, that’s changed.”
Work-from-home opens ‘floodgate’
S&P Global Market Intelligence surveyed 575 companies in June last year, 80 percent of which said they implemented or expanded work-from-home policies as a result of COVID-19. Of those, two-thirds said those policies would remain in place permanently or for the long-term.
Most of Newland’s home sales has been to young, millennial families.
“This work-from-home phenomenon has opened that floodgate. A lot of them were tied, kept up there, because of the commute, but they are starting to have kids and or they know they want to,” Ledesma said.
In March 2020, Gov. Jay Inslee ordered non-essential businesses to close or let employees work from home. Essential businesses like grocery stores and health care providers were allowed to continue in-person services. Employers like Amazon and Microsoft have extended teleworking for the foreseeable future.
Home sales continue at a strong pace throughout Pierce County, Assessor-Treasurer Mike Lonergan said. His office calculates and collects property tax across the county.
Countywide, residential sales are up 4 percent. Key Peninsula/Anderson Island saw a 27 percent increase in sales from last year. Sales in south county areas like Graham, Roy and Eatonville are up 18 percent, according to the Pierce County Assessor-Treasurer’s Office.
Sales in areas closer to King County, like Northeast Tacoma, have increased by 10 percent. The Sumner and Bonney Lake area is up 13 percent, as is the the Spanaway/Fredrickson area. Sales for Tehaleh have yet to be finalized, the office said.
“Our rural areas often have lower price points than the urban centers, and certainly lower than King County,” Lonergan said in an email. “Also, as some employers decide that temporary work-from-home policies may become permanent, more people have the opportunity to relocate away from job centers.”
2020 a good year for builders
During a time when many business sectors have seen smaller profit margins, 2020 was a good year for builders.
Newland Communities saw a year-over-year increase of 28 percent in home sales. The company said it sold 349 homes in 2019 and 447 in 2020.
Azure Northwest Homes sold 54 homes in 2019 and 89 in 2020.
Tom Young, founder and managing principal at Azure Northwest Homes, said the 2020 increase in sales is a result of more teleworking, a lack of affordable housing and a growing business sector in the Seattle metropolitan area.
“Basically, it’s just because of the lack of inventory. There just aren’t enough homes being built to meet the demand,” he said.
Tehaleh seems worth the commute if employees have to go into the Seattle office only once or twice a week, developers said.
“There’s probably now more homebuyers that are more willing to live further out from their offices. But I think one of the larger reasons why people are willing to move is just a lack of affordable housing,” Young said. “Because you go into Bellevue for a house with $500,000, good luck.”
A real estate listing service, Northwest Multiple Listing Service, estimates a median King County home closed in Dec. 2020 cost $740,000, compared to $439,000 in Pierce County.
Developers agreed the incredibly low-interest rates have helped many search for their first homes. Interest rates across the country largely remain below 3 percent.
“We’ve seen specifically this year a lot of people citing their reason to move is that they want to stop renting,” Ledesma said. “That’s been huge for two reasons. One, people can finally get out of their studio, and two, they can afford it, because the interest rates are supporting that for them.”
COVID-19 affects home design
The COVID-19 pandemic also has changed home demand and design.
People want more space now than when they were living downtown, Scott Jones, Newland’s senior vice president of operations in the Puget Sound.
“They need that release a little bit. Even just getting out to the patio is a change of scenery from being at your kitchen desk all day,” Jones said. “Sometimes there’s those small things that we needed and still do, until things kind of return back back to normal.
More have asked to convert dens into home offices as work from home continues, Young said.
Oftentimes homebuyers have asked to move a home office to the back of the house where things are quieter, rather than near the entryway, Jones said.
Developers said Pierce County should expect housing prices to continue to rise as more people move to the area.
“The market sets the prices, and that shift is pushing prices up, but fundamentally only one reason price increases, and that’s because supply is limited and demand is up,” Jones said.
He believes that growth will continue across the county, connecting current “islands of development” like Spanaway, South Hill, Parkland and Tehaleh.
Young said the price of building homes is accelerating faster than salary increases. He believes that Pierce County is about to get “tapped out” of developable land and builders will move to Kitsap County.
“As time continues, we’re going to see the cost of housing and development outpace people’s income,” he said. “It has been happening for years, and it’s going to get worse.”
