Seattle’s booming and diverse economy has spurred unprecedented development and population growth with a clear urbanization trend. Thanks to leading employers on the front lines of enabling essential services and work-from-home agility, Seattle weathered the COVID-19 challenges of 2020 better than many U.S. metros. The past year saw increasing competition from the Southwest, as Phoenix, Las Vegas, and the state of Texas drew refugees from higher taxes and a deteriorating quality of life in the state of California. Will the City of Seattle regain her nation-leading position?
The COVID-19 lockdown and coincident political unrest wreaked havoc on the local economy. The Downtown Seattle Association reported,
The area lost 45,000 jobs in the second quarter. This compares with 28,000 jobs lost during the Great Recession. All told, downtown lost nearly six percent of its residents and almost 12 percent of all jobs last year. The retail sector and the combined hospitality and arts sector were hit especially hard, with the former seeing jobs decline by 42 percent, and the latter losing a whopping 61 percent. ‘It was tragic and it was immediate,’ said Tom Norwalk, president and CEO of Visit Seattle, one of the speakers at DSA’s virtual State of Downtown in February 2021. DSA said it does not expect a full recovery for two or more years.
The restrictions imposed under the threat of COVID-19 doubled King County’s unemployment rate from 3.4 percent in 2019 to 6.8 percent in December 2020. Yet as these conditions prevailed nationwide and were not confined to our own region, Seattle’s out performance of competing metros presents opportunities to value-seeking investors, entrepreneurs, and jobseekers. Seattle still means business, with 1.68 million employed in the Seattle metropolitan statistical region (“Seattle MSA”). According to the U.S. Bureau of Economic Analysis, the Total Real Gross Domestic Product (GDP) in chained 2012 dollars of the Seattle MSA was $382.6 billion in 2019—two-and-a-half times that of metropolitan Vancouver. With 3.98 million residents, that brings the Seattle MSA’s per capita GDP to $96,135. As the Information Technology (IT) center of the Pacific Northwest, sometimes referred to as the “Silicon Forest,” Seattle and the Eastside dominate job growth in the region. Accordingly, Seattle has emerged as the nation’s top labor market by percentage of workers in STEM fields, with 19 percent of its 470,000-strong workforce thus employed. In the preceding two decades, the city’s growth was led by Amazon’s meteoric rise.
With ample employment, no state income tax, and relative affordability compared with other West Coast gateway cities, such a reputation has made it easier for employers to recruit and retain talent here. This equates to a roughly 60 percent increase with most new residents choosing to locate near job centers to avoid commuting. That outcome is observed by savvy corporate tenants, too, as tech companies enjoy relative affordability in Seattle as well. Office leasing in downtown Seattle is still significantly less expensive than Manhattan, even after rents there have fallen to $74.39 per square foot, from $83.28 a year ago. These many advantages will continue to draw expanding companies to Seattle rather than competing West Coast markets.