Downtown Seattle Renters Lost Nearly $10,000 In Deductions on Tax Day 2021 & Missed Approximately $288,934 In Appreciation Over the Last Decade
Experts Witness a Sea-Change in Downtown Seattle Condominiums: 50% More Absorption with 24% Fewer Resale Listings Year-Over-Year 2021; New Construction Starts Likely Deferred
Executives of Realogics Sotheby’s International Realty (RSIR), Caliber Home Loans and O’Connor Consulting Group have published research for Tax Day revealing that, over the last decade, new residents who elected to live in brand-new, luxury apartments instead of owning a like condominium have paid more than $50 million collectively (or $218,983 individually) in unrecoverable lease payments. Meanwhile, the average renter missed an estimated $288,934 in average capital appreciation over the same period and approximately $9,228 of income tax deductions for 2020.
“Homeownership remains one of the greatest opportunities for Americans to build wealth and enjoy tax benefits,” said Dean Jones, President and CEO of RSIR. “Those eying a purchase today in downtown Seattle will likely look back a few years from now and realize that they’ve timed the market perfectly.”
To contemplate the financial differences between owning and renting in downtown Seattle during the past ten-year term, the collaborative reviewed the trends in both apartments and condominiums that were built since 2010. Approximately 27,000 new multifamily housing units were delivered in the urban core, however 93% of this new supply was purpose-built for rent and not for sale. According to the Downtown Seattle Association (DSA), more than 88,000 residents now live in the city center. In one of America’s fastest growing cities, 82% of the downtown housing stock is comprised of rental apartments. Nationally, the homeownership rate is 65.3% per the U.S. Census Bureau, however, the latest Census reports for the City of Seattle suggest that a majority of residents are renting—for the first time since 1950.
“Despite the slowdown in 2020 due to COVID-19, political headwinds and social unrest, no other major U.S. city witnessed such population growth and percentage increases in both household prices and rents over the past decade,” added Jones. “An unfortunate result of so many residents opting to lease a downtown apartment instead of owning a downtown condominium is that thousands missed out on both capital appreciation and annual mortgage interest deductions on Tax Day.”