Seattle’s housing market is showing signs of strain, with typical property values falling by roughly $100,000 in a single year as debate intensifies over the city’s progressive policies.
An analysis by broker Matt Goyer found that the average Seattle home was worth $891,500 in July, representing a nine percent decline from the same month a year earlier.
The downturn comes as some wealthy residents and major companies consider leaving Seattle ahead of the introduction of a controversial tax targeting high earners.
Approved earlier this year by Washington’s Democrat-controlled Senate, the tax is scheduled to take effect in January 2028. Seattle Mayor Katie Wilson, a democratic socialist, has previously described warnings that the measure could drive away wealthy taxpayers as “overblown.”
The proposed levy would impose a 9.9 percent tax on households earning more than $1 million annually. Supporters say the funds will help pay for K-12 education, healthcare and other essential government services.
Luxury-home listings surged by 65 percent the day after the tax was announced, while dozens of properties priced above $2 million were placed on the market, according to Northwest Multiple Listing Service figures.
That potential outflow is unfolding alongside extensive layoffs in Seattle’s technology sector, a major force behind the city’s economy and high-end real estate market.
Amazon, Google and Microsoft are among the technology giants that have recently scaled back their presence in Seattle.
Seattle home values are falling as an exodus from the city is linked by some experts to a range of progressive policies
The price of a four-bedroom townhouse in Fremont was reduced by $40,000 in one month after the sellers struggled to attract buyers
Business leaders and market analysts have cited several factors behind the relocation trend, including Seattle’s tax burden, elevated housing costs and concerns about crime.
Keith McCall, CEO of Seattle-based satellite intelligence firm Omniris Group, said he has considered moving the company because of what he views as an increasingly hostile business environment.
“Candidly, I’ve even found myself thinking about moving back to Canada,” McCall said, pointing to “taxes, regulation, cost of living, public safety” and lifestyle as contributing factors.
Seattle ranks among the US cities frequently criticized for high crime levels, with opponents often linking the problem to the city’s handling of drug offenses and low-level theft.
Combined with home prices that are 111 percent above the national average, those pressures are prompting some residents to look elsewhere.
“With inventory sitting near 15-year highs, buyers have significantly more leverage than in recent years,” Goyer wrote in his Urban Living newsletter.
Pending sales in Seattle are also declining faster than in other US cities, according to a recent analysis from Redfin.
“Seattle is a tech-driven market, and right now a lot of buyers are feeling cautious about layoffs, AI and job security,” said Chase Costello, a Redfin Premier agent in the area.
Mayor Katie Wilson has previously played down concerns over the possible effects of the millionaires’ tax
A Madrona home listed at $2.5 million was reduced by $250,000 during its first three months on the market
Tech talent has flocked to Seattle over the past two decades, turning it into the second-largest tech hub in the country second to San Francisco
‘Tech workers aren’t moving between companies—or moving into the area—as much as they used to, and that means fewer people are trading up into new homes,’ the report stated.
Among the properties languishing on the market is a two-bedroom three-bathroom home in Madrona, which went down in price by $250,000 since it came on the market in early July.
Another example is a townhouse in Fremont, the owners of which had to cut $40,000 off as they struggle to find a buyer.
‘We’ve only had a handful of people even view it,’ the owner told The Seattle Times.
‘I find it really frustrating now because when we were shopping for a house, it felt like houses would only be on the market for a short amount of time.’
Seattle’s tech industry is also suffering from recent changes to work visas for foreigners such as the H-1B, a visa category often held by tech talent from overseas, Geekwire reported.
Pending home sales are falling faster in Seattle than anywhere else in the country. Real estate experts believe the recent tech-layoffs have created fear in prospective buyers
Many giant tech companies such as Amazon and Microsoft have their headquarters in Seattle Washington – a lot of the city’s wealth is driven by the tech sector
The city’s tech scene also heavily relies on H-1B workers, with Amazon having the highest number of H-1B approvals in 2025 with 13,625 beneficiaries, followed by Microsoft at 6,258, according to a report done by Boundless Immigration, a Seattle-based US legal technology company.
The median reported salary for an H1-B worker in Seattle is 150,600, according to data provided by H-1BTrends.
As H-1B restrictions become stricter, many foreign tech workers chose to leave the country and go back home to avoid the uncertainties, a dozen H-1B workers shared with The Seattle Times.
