King County home prices hit their lowest point for July since 2012

Is that faint rumbling we hear in the distance carryover from Seafair Weekend and its barrage of air and sea entertainment? Or could it be that ever-elusive housing bubble finally popping and coming back down to normal levels of absurdity?

After all, even the Blue Angels have left town.

Maybe they saw the inevitable spin back down to earth. Or perhaps we’re all just blowing this housing cooldown out of proportion. Whatever stance you take, one thing’s certain: the Seattle-area real estate market has fallen to its lowest point in four years, shedding a crevice of light for homebuyers and inducing a fleeting shock of panic for owners sitting on their plots of gold-laden land.

The number of homes for sale throughout King County rose a staggering 48 percent in July as compared to a year ago, according to the Northwest Multiple Listing Service, which means inventory now exceeds 2015 levels. The 48 percent jump is the biggest we’ve seen in a decade and is mostly due to homes that have been waiting patiently for owners on the market. All signs point to a noteworthy dip in demand, as July home sales reached their lowest prince since July of 2012, when the market was at a low point.

How big was the decrease? King County’s July median home price of $699,000 is down $27,000 from the record highs we saw earlier this year. Last year, July was the most expensive month of the year.

In Seattle, home prices were down $25,000, making the median $805,000. Eastside prices also saw a dip, falling $30,000 in just a month to a median price of $947,000. Snohomish County, not one to be left out, also saw an increase in active listings, up almost 16 percent from this time last year.

Have we finally hit the ceiling? If we have, it’s not just regional; the national trend at the moment is one of a long-awaited inventory uptick just as hotspots like Seattle, Silicon Valley, and Austin are finally cooling off—metaphorically, of course (enjoy 90 degrees this week). Seattle is unique in the fact that its home sales saw the second-biggest jump in the country, according to info gathered from realtor.com, right on the heels of our neighbors down south in Silicon Valley.

Why is this happening?

Those in the know point to stabilized rents, high mortgage rates, slightly less frenetic population and job growth, and waning interest from Chinese buyers.

Many are already shouting, “I told you so!” at the top of their lungs but, as always, time will tell if we’ll continue this down-surge or if we’re all just suffering from a curable case of “buyer fatigue.” In the meantime, inventory levels are still an issue; while King County has doubled its March inventory, we’re still significantly below a healthy four-to-five months of inventory, according to Robert Wassa of the Northwest MLS board of directors. And people still need a place to live in some capacity.

We’ll be hearing a lot more about our region’s housing trends, whichever way they end up going, in the weeks and months ahead. Stay tuned.

Originally reported by Mike Rosenberg in the Seattle Times, “More Seattle-area home sellers lower list prices as market cools way down,” August 6

Data gathered from realtor.com and the Northwest Multiple Listing Service

By MBAKS Content Strategist James Slone

Reducing greenhouse emissions means housing more people in healthier, more energy-efficient homes in cities near jobs, amenities, and transit. Unfortunately, a lack of affordable options has priced residents out of booming cities like Seattle and into sprawling suburbs with long, carbonintensive commutes.

A new generation of homebuilders understands that the lack of affordable housing and climate change are related problems requiring interlinked solutions. One of the leading lights in this new way of thinking and acting is Green Canopy NODE.

Where housing is located and who can afford it matters as much as how it’s built—a realization Green Canopy NODE intuitively grasps. For them, solving the housing problem at scale means creating a new paradigm where green housing is accessible to people of all income levels. It sounds easy, but it’s complicated.

Green at Scale

Green Canopy NODE brought together Seattle-based carbonmitigating construction firm NODE with Green Canopy, a green development and construction company based in Seattle and Portland with a long history helping lead the net zero revolution.

In a 2021 press release announcing their merger, Green Canopy NODE Co-CEO Bec Chapin said that the company’s aim was “an evolution of the industry to build more houses faster that create greater health, wellbeing, and resiliency for people and communities now and in the future.”

For Aaron Fairchild, Green Canopy NODE co-CEO, it’s as much a moral question as a practical one.

“As humanity continues to grapple with the need to house more people, our communities and planet feel the strain. We’re trying to lessen the strain and offer more regenerative solutions that help build communities while prolonging the life of the resources required to do so.”

For Green Canopy NODE, transforming the homebuilding industry requires a multifaceted approach: building more housing where it’s needed, offering a full suite of development services to other housing providers, prefabricating building components offsite, and deploying an impact investment fund for projects.

Build, Build, Build

Green Canopy and NODE’s coming together allowed them to pool their respective experience in green development and technological innovation to scale up construction, leading to their multifaceted approach. I recently chatted with Fairchild to find out more about each aspect of their overall work.

Obviously, the first is building housing, lots of it.

Green Canopy NODE builds rowhouses, townhomes, and multifamily units because they’re a more affordable option for families who want to live in high-quality neighborhoods with jobs and amenities. They are experts in the “missing middle” with the real estate chops to secure land for infill development.

Not an easy ask in a city where land value is through the roof.

“It’s hard to build affordable housing in urban areas where housing is needed most,” Fairchild explains. “It requires greater subsidies and a more flexible approach. As time goes on, private, nonprofit, and public partnerships will become the norm.”

It’s not enough to just build them. They also have to be green.

“Nearly 100 percent of our homes are Built Green or Earth Advantage Certified,” says Fairchild. “At Green Canopy, we historically focused on energy efficiency. We’ve always built all-electric homes and have completed several net zero homes,” or homes that produce more energy than they take from the grid.

Building green homes not only helps the environment; it also makes housing a more affordable proposition. “Because we build homes that perform well beyond code, utility costs are lower, and residents save money.” Remarkably, the company is able to deliver net-zero-ready homes to the market at the same price as code-built.

But decarbonization is no longer just about saving energy. Green Canopy NODE has recently started focusing on carbon emitted from the production of their building materials, what’s known as embodied carbon. Making sure embodied carbon doesn’t outweigh a home’s performance is the next frontier in green building.

Promoting Innovation

Perhaps the most essential element of lowering green construction costs is using new technologies to increase productivity, including standardizing building components, modernizing the workforce by training them in the latest in construction methods, and manufacturing pre-fab building components.

For Fairchild, manufacturing is especially important. “To scale up and lower costs, the industry will need to embrace the power of off-site manufacturing more and more. It is the only known pathway to the sort of efficiencies required to build more sustainable, higherquality, lower-cost housing.”

By manufacturing offsite in the controlled environment of a factory and quickly assembling components onsite, Green Canopy NODE avoids inefficiencies. The company is investing heavily in pre-fabricated solutions that can be moved directly from manufacturing facilities to project sites.

They’re especially excited about fabricating cross-laminated timber (CLT)—an engineered wood product made from wood stacked and glued together at 90-degree angles—for residential mid-to-low rise construction.

CLT is easy to carve and groove with computer-controlled cutting machines, making it uniform and easy to install. The best part? “Along with being a beautiful and exceptionally strong building material,” Fairchild enthuses, “CLT also sequesters carbon and can be reused at the end of a building’s life."

Spreading the Love: Development Services and Impact Investment

To deliver the high volume of housing needed to have a substantial impact, Green Canopy NODE also needs to be able to employ their strategies on an expansive multi-project scale. The best way to do that is by extending a helping hand to other builders and nonprofit housing providers.

Their real estate development services have helped complete hundreds of homes reliably and cost-effectively. Current projectpartners include Sunnyside Village Co-Housing, Habitat for Humanity, Africatown Community Land Trust, Homestead Community Land Trust, and Grow Bainbridge.

Their services cover all aspects of homebuilding, including acquisition, finance, estimating and feasibility, architecture, construction, and warranty services. The key to their services’ effectiveness, says Fairchild, is that they’re vertically integrated.

“Vertical integration means our team can work with you at any stage of the development process, avoiding the headache of external bottlenecks.” It lowers the cost of developing housing projects because it cuts construction costs by consolidating different stages like R&D and procurement.

The result is a high degree of flexibility and control. “We’re able to rapidly respond to requests, enhancing our ability to collaborate.” And because the company manages real estate funds, they can drive housing demand in a way that’s “aligned with our sustainability and technology goals.”

The company created an impact investment fund management firm, Green Canopy NODE Capital, to invest in infill building projects in Seattle and Portland.

Currently, Green Canopy NODE offers both investment and fund management for more than 90 shareholders and over 45 limited partners. Over the last decade, the company has leveraged their building expertise and knowledge of the housing market to raise and manage over $70 million in accredited investor capital.

Heart and Soul

Green Canopy NODE has already tallied an enviable list of accomplishments. As of this writing, they have built more than 300 Built Green and Earth Advantage Certified homes in and around Seattle and Portland, mitigated 33,000 metric tons of greenhouse gas, and steered investment to six major infill projects. And they’re just getting started.

This success isn’t just an outcome of their business acumen. It’s driven by a housing philosophy. Housing is the “nexus of our lives,” their website declares, “providing shelter, safety, and security,” a place “where one can develop a sense of love, belonging, acceptance with friends and family.”

Housing is also a solution to sprawl, homelessness, and climate change. Its importance goes far beyond profitability. It may seem idealistic, but the company genuinely believes that a change in paradigm requires a change in thinking. Fairchild says that a sense of mission permeates their company culture.

The Green Canopy NODE team, he says, shares a sense of purpose, and “a desire to regenerate communities and environments.” When they take on new team members and partners, they “look for people from communities seeking greater empowerment and renewal.”

Of course, technology, experience, and expertise are crucial to carrying out the day-to-day work. But it’s their focus on community that may be the key to unlocking the new homebuilding paradigm. It’s the heart and soul of Green Canopy NODE.

Article photos courtesy of Green Canopy NODE

Contact: data@mbaks.com

This month's Builders Bulletin features a new data point, the NAHB/Wells Fargo Housing Market Index (HMI). This is a national and regional indicator that tracks builder perception of current single-family home sales and expectations. It has decreased every month in 2022, reflecting a general bearish outlook towards the housing market amid rising construction costs and high interest rates.

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