Seattle Real Estate Shake-Up- Redfin’s Big Move, ADU Data Confusion, and the One Seattle Plan Lawsuit

Christian: [0:01] Hello there, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Nossum of the Nossum & Nossum group at Wilson Realty Exchange, Inc, and today we're talking about Seattle real estate news. Now, we've never done an episode like this before, but we think it's pretty important to do, so I think we're gonna start doing it here and there whenever there's a series of news topics that are kinda relevant to both home buyers, home sellers, and real estate investors. So today, in this episode, we are going to be covering, first, the acquisition of Redfin by Rocket Companies, by Rocket Mortgage and all that. We'll talk about what's behind the deal and what it might mean for the future of real estate services. Next, we'll dive into the surprising rise in condo prices in Seattle and how ADUs or DADUs or DADUs might be playing a role in that. Next, we'll look at the current mortgage rates, how they're trending, and what that means for affordability in the area. And finally, we will break down the One Seattle plan, including a recent lawsuit, the city's legal battle, and what's coming up with the May 21st public hearing and the May 30th deadline that it has. Joining me to tackle all of these are my amazing co-hosts, Joanna Beecher Varun Jain

Varun: [1:14] Hey

Christian: [1:15] and Shannon Awesome.

Joanna: [1:16] Hello.

Christian: [1:16] All right. How are you guys doing today?

Joanna: [1:18] I'm doing awesome, Christian. I'm excited to jump into today's topics.

Varun: [1:22] Yeah, same here. Uh, there's a lot happening in the Seattle real estate scene.

Shannon: [1:26] Yeah, this is… I can't believe we've never done an episode about this before, but I'm excited to talk about all these. I know we've been talking about them as a team, so yeah, it's good to share what we've been talking about with everybody.

Christian: [1:36] Yeah, I agree. I don't know why we've never done one like this. I think this is gonna be something that we do more often because it's a little more timely and we all have our opinions on all this, so might as well go into it and share it with everyone else. This is the stuff that- … when we're, yeah, when we're at real estate events, whether it's our beers and home buying class or real estate at work or the WARE real estate investor meetups, um, these are the things that people ask us about anyways. Or when we're just out and about in normal everyday life, people that know that we're in real estate, they always ask us what's going on This is just a, a great way to, to kinda go over it. All right, so let's jump in. Our first topic is the recent acquisition of Redfin by Rocket Companies. Now, Rocket Companies is a major mortgage lender, and they agreed to acquire Seattle-based Redfin in an all-stock deal valued at $1.75 billion. This transaction aims to integrate Redfin's real estate brokerage services with Rocket's mortgage offerings, potentially streamlining the home buying process for consumers.

Joanna: [2:38] Yeah. Um, as w- uh, people may or may not know, I actually used to work at Redfin. So although this is kind of surprising, it's not surprising at the same time. I think it's more interesting that they're being bought because when I was there they were buying other businesses like Bay Equity Mortgage a few years ago. So kind of in the same vein of what is happening here, you know, it seems like they're trying to set it up for a very streamlined buying, you know, experience basically. And, you know, where it can kind of appear that way, I, I do wonder about some implications there because as I remember back in the day, they were, you know, really wanting us to only bring up the mortgage company that they had bought for our clients. So yeah, I, I think it's, it's interesting, you know, when it comes to- Competition and consumer choice, things like that, you know?

Christian: [3:38] Yeah. I could see that being an issue in the future, knowing that they're pretty much only going to most likely offer the company that they're a part of as the, as the, the one choice you get, which probably is not going to be the best thing for the consumer.

Joanna: [3:53] No. And also- Yeah … yeah, we s- we talk about that in the buyers and home buying class. Mm-hmm. You know, just how specific lenders are very important to you as a buyer for many reasons in, in a competitive situation, you know? It's very, very important who you choose, so.

Varun: [4:11] I, I agree, and I th- I think there are two points to this. One is yes, that there is a concern that might reduce the number of choices out there, and hence reduce competition. But I'm also kind of curious to see the flip side, where the tech integration between Rocket and Redfin, who both kind of try and market themself as tech companies as well, outside of just mortgage and real estate broker business. Tech integrations might really simplify transactions. It might become a one-stop shop, so consumers might get attracted towards that ease of business And would, might be p- willing to pay a little bit extra, or it might have a very adverse effect on the industry as well. So we'll have to wait and watch how this shapes out and whether or not it will be a good or bad thing. But yeah, there's a lot to unpack here as more details will be available in the next few months.

Shannon: [5:02] Yeah, I was gonna say, I, as much as I don't necessarily love their business model from a consumer standpoint sometimes, they do have a great tech platform. I like, I have options of other things I can look at, and I enjoy looking at Redfin. And so I think they have a great search method. One thing we didn't mention was the CEO said that if Redfin hadn't sold in this way, that it might have been stripped for parts, 'cause I don't think they were really that profitable. And so that would've been really interesting had that perspired and happened.

Christian: [5:35] Yeah, that, that is a good point. I actually would've preferred that.

Joanna: [5:38] Me too. Me too. That's what I was thinking. I'm like, "I wish it would've been."

Christian: [5:42] Yeah.

Joanna: [5:43] Just keep the scrolling, you know? Keep our search engine there for… 'Cause they do, like you said, Shannon, they have a great app for, you know, scrolling- Yeah homes. It's beautiful, so.

Christian: [5:54] Yep. Yeah, and it's, it's funny, so we have, and I say this in our Beers & Home Buying class every month too, but Redfin is a great tech company. Their app is fantastic. Unfortunately, the broker side has, is a lot to be desired how it's set up, and they tried to revolutionize the whole way that real estate was done and how agents are paid and all that stuff, and it just was never, ever profitable. And that's why they've literally from the beginning until, when Redfin started until today, they did a complete reverse on what they were doing and what they offered to buyers in terms of finances, in terms of rebates and stuff like that. So when it first came out, the buyer got the entire commission as a rebate. Now, there's literally no rebate. On the commissions at all. Like, became a regular old real estate brokerage, and now they're doing what agents that don't have, or brokers that maybe aren't the best, what they tend to do is they fight each other on price, meaning they're gonna- they're gonna be the lowest cost, and that's what Redfin started doing. So it's, I mean, it's kinda unfortunate that it wasn't sold for parts, 'cause I wish the- the app tech side was sold to maybe a brokerage or some other company- Yeah … that was gonna allow that to continue on. I- I predict, personally, that it's probably all we're gonna see now is once you look at the house, then it's gonna be apply, pre-appro- or pr- get pre-approved for a mortgage through Rocket Mortgage, and it, they're gonna push that so hard. And Rocket Mortgage owns all of the other companies as well along the way, and so they are trying, they're going to try to make this a one-stop shop. Again, this is my opinion. But they're gonna try and make it something that you can do all in the app. Which, in theory, I love. I love making this simpler for consumers. In practice, it's very, very difficult to do, as we have seen over and over again. It just has not worked. Maybe this is the way that it works, but I don't think it's going to, and the big reason why is because Rocket Mortgage, in my opinion, really sucks. Well, yeah. I am, I've never, I've never had, ever in my 20 years, and Rocket Mortgage has been around for probably 10 of those, the last 10, I've never had a client, or even on, when I'm representing, or even if I'm representing the seller and the buyer is trying to use Rocket Mortgage, never once have I ever had one successfully close. And if it did close- Wow … maybe there was one. Uh, no, it wasn't. So it didn't close. They switched lenders. So every single time they always switch lenders probably three-quarters of the way through when they're supposed to close. So, like, if it's a four-week transaction, three weeks in they finally realize this is not gonna close on time And they're, what they promised me isn't what's actually happening, and they switch to another one.

Joanna: [8:49] Wow. And I mean, that being said, um, trying to streamline something that is so not black and white-

Christian: [8:57] Yes … Joanna: is just gonna be just, there's gonna be so many issues that aren't gonna be addressed, and I don't think can be addressed in a way that they're trying to set it up. It's buying a home, two different parties with a ton of emotions on both sides, and like there are so many different ways a transaction can go, and you're gonna tell me by streamlining it and making it just all one-stop shop that that's going to be like a just, you know, no issues there, not a problem. It's like, no, there's so many issues I can think of right off the bat. Mm-hmm. And the first one is just that emotional piece that is, you know, that's one of the biggest ones. And I think, you know, to have all of these choices that, you know, you don't get to make anymore as a buyer and you don't get to do certain due diligence as a buyer or a seller. I work with mostly buyers, which is why I keep going there. I think it's really important to think that through a bit. Mm-hmm. And you know, I would say best of luck, but I don't mean that. I'm like- … go away.

Varun: [10:08] I, I, I'll, I'll, I'll, I'll give a kind of a interesting example. Secondhand car buying has completely changed since the pandemic. People buy cars online now secondhand as well. So we've seen that industry go in a very different direction where in the past you would buy a secondhand car, you would take it to a mechanic you trusted, have them do the run through, and then buy the car. Now people are buying it online as if they're buying groceries or gift cards. Mm-hmm. And so that industry has changed, and technology has allowed that industry to change. So I, I'm very curious I'm in, I'm not in either of the, uh, camps here. I'm really curious as a ex tech person. Mm-hmm. I'm curious to see how they integrate the technology because as Christian mentioned, Rocket also owns a bunch of different businesses associated with the real estate, uh, uh, industry. And so if they can really vertically integrate and do it well, then there is definitely some disruption in the industry that can happen.

Christian: [11:09] Yeah.

Joanna: [11:10] I would- I do wanna say, sorry, really quick, Christian, on that like buying cars offline note, those are also, I've heard horror stories that, of people who have used like Carvana and such. 'Cause I was thinking about it before. I bought my own used car not that long ago, but I went to an actual dealer and I am so glad that I did, 'cause I was gonna go Carvana and I heard some terrible stories. I don't need to get into it, but I just wanted to say I don't trust that type of buying experience.

Varun: [11:40] Yeah. And, a- and I agree. Like the price point. You're, you're talking about- Exactly … 10, 15x the price of the car. Yes. Yeah. So yes, the price point also is a big issue here. Yeah. Yeah. You're not buying a 10, $15,000 used car, you're buying 800 to a million dollar home- Yeah … maybe more. So yeah, it's a very different ballgame. But yeah, I, it's just interesting to see how kind of this plays out or maybe this deal doesn't go through and Redfin gets sold for parts. Who knows? We'll see. Okay.

Christian: [12:05] Woo-hoo. Yeah. And, and Rocket did say when they did this, the big reason they did it was for all the data. So all of the home buyer data that they have, all the search data, all of the listing data, all the data they have on all these homes, they're buying it for that as well. That's where, that's where the money is. So all this data that they have on us as, as home buyers as well that are using the app, they're gonna use that to their full advantage as well. So- Yeah … it's, it's pretty interesting.

Shannon: [12:34] Can't wait to see what they do with it.

Christian: [12:36] I know. It's gonna be interesting. All right, so let's move on to our next topic. Something that's been making headlines lately is this giant reported spike in Seattle condo prices. Here's the thing, though, it's, it's going to be a little misleading, and it is a little misleading because what's actually happening Are the accessory dwelling units, ADUs and DADUs, detached accessory dwelling units, which we refer to as DADUs, they're being built and sold in Seattle, and the way that you can sell them off individually in Seattle is by making them technically condos. So you buy a house, you build a DADU in the backyard, like a backyard cottage, then you make them, the house and the DADU, you make them condos, then you sell them both off separately. So you're selling a single-family house. For, for instance, we did this on a project in Magnolia where we bought a house for $930,000. We flipped it. We resold it for $1.2 million. But when we resold it, it's now technically a condo. We also built a DADU in the backyard. That sold for whatever, that $925 So now that's technically a condo as well. So we took a single-family house, removed that from the stats of single-family homes, and added two pretty high-end condo prices to that list of, or to the data set for condos, and that's why we're seeing such a big increase. We- We are the problem. You can blame us for this skew.

Joanna: [14:06] I would say that you're not part of the problem, Michelle. No, no. It's how, like, how they're classifying these things, you know? So it's like you see this headline saying, "Seattle condo prices are soaring." It's not actually, like, that your typical downtown or Capitol Hill condo is suddenly worth way more. God, like, I hope people aren't actually thinking that, like, and getting excited like, "Oh!" Well, if

Christian: [14:29] they only pay attention to the headline, that might be- Yeah … what they're thinking. And that's- Exactly … I mean, that's fair, but you gotta always read the story.

Joanna: [14:35] Exactly. And they're just being lumped into that same sales category, right? And with these, you know, new, modern standalone units, most of them have private yards and higher-end finishes too, and because they're priced so much higher, it just distorts the average. I mean, and honestly, there are some great options out there for condo buyers who want something that is different than your typical condo, so… But anyway, yeah.

Varun: [15:02] Yeah. And, and DADUs and ADUs are, are… They're detached units. ADUs maybe share a wall, sometimes just a wall within a closet or a wall in the garage with the main house. So they are, for all kind of practical purposes, individual units, but it's how the data and the reporting works for MLS and the public record. So they get lumped into the condo category, so now you have, as Christian mentioned, the house, the ADU, DADU all become condos, but they are, from a usability standpoint, all kind of act like a single-family home. So yeah- Yeah … uh, that, that's kind of, uh, leading into this. The headlines, I get that it's more of eyeball-grabbing headlines, and then you double-click into the details.

Shannon: [15:43] Yeah, I mean, it's important to always look beyond headlines, and I think there's a lot of times we all have seen articles a lot of times that are not accurate to what's really going on, or the way they frame the wording in the headline. And so this happens often, where we'll see an article and be like, "Oh, man, why'd they say that?" Like, that's not actually what's going on. So it's important to do things like listen to this podcast and, like, trust your experts to be able to explain the scenarios to you. One of the other reasons, I just want to say, like, why these, um, obviously these houses like we did in Magnolia or the DADU that we built are such a high price too is 'cause most of these are also new construction, and new construction sells more per square foot. So when you're having this category of things that are brand-new, that's gonna really be a very high price point in any area. And so that really accelerates the, the difference between the original traditional condos we like to think of and these new ADU/DADUs.

Christian: [16:40] One thing I will say is- I do think, and I do believe there are, or there is more activity with condos, especially South Lake Union, Belltown, downtown, because of the new, new, you know, no more work from home, but now you gotta be in the office five days a week mandates from Amazon and some of the other tech companies that have big office spaces downtown. So, I do think that there is more activity happening in the- Yeah … condo market. Uh, we recently had a listing where we represented a seller that was selling a Belltown condo, and once those, we put it on in December, not the greatest time to put it on, but that's when they wanted to put it on the market. Once the work from home kind of ban kind of took place and said you have to be in the office, we definitely did see a larger increase and influx in showings, because people were more interested in buying back into the city. So, I, I don't know. We haven't looked into the stats, and maybe that's something that we can talk about on another future episode. But we, my guess is there is more condo selling, I just don't think the prices are skyrocketing like the headlines.

Shannon: [17:51] I wish they would separate them. Like, can we not just figure out how to separate these? I mean, we know what's being built. Basically anything that's being built brand new right now really should go in a different reporting category, I feel like, 'cause they know it's an ADU and a DADU. Like, we know that.

Joanna: [18:05] I agree, Shannon. I don't know. There should just be a different classification.

Shannon: [18:08] Yeah.

Joanna: [18:09] That's all.

Christian: [18:09] Yeah. Eventually, they probably will. Yeah. But they haven't yet.

Shannon: [18:13] Yeah. I just also wanna say, I think ADUs and DADUs are the new townhouse.

Christian: [18:18] Totally. They

Joanna: [18:18] are.

Shannon: [18:19] Just saying.

Christian: [18:20] Yeah. Yeah. No, I agree with you. Yeah.

Shannon: [18:22] I mean, I don't know what townhouse prices are doing, but I would assume that maybe they're not as hot as they used to be.

Christian: [18:28] They're, they're staying pretty flat-

Shannon: [18:29] Yeah … Speaker: from what I've seen. Yeah. ' Shannon: Cause, uh, 'cause if a buyer has the option of this detached unit, probably with less congestion on the lot, they might choose that if the price is very similar, so.

Joanna: [18:39] Exactly.

Varun: [18:39] Yeah. And a yard.

Christian: [18:41] Yep.

Shannon: [18:41] Yeah, and a yard. Yeah. I know there's just not as many townhouses being built anymore because, as somebody who does develop these, and I know Bruin develops these too, they are much faster to go through permitting and to break ground than it is to go through the permit process for a townhouse. So builders prefer the ADU, DADU plan versus going townhouse route most of the time.

Christian: [19:01] Yep. Yeah. And the city also has implemented some pretty high additional fees for townhomes to be developed, called MHA fees. So-

Shannon: [19:09] Yep, yep … Speaker: that's another reason they're not being built, is 'cause they add a, you know, depending on the area, it could be a $200,000 fee just to build them, and that makes it not profitable or maybe not as profitable, which-

Varun: [19:22] Yeah

Christian: [19:22] yeah.

Shannon: [19:23] Yeah. What does

Varun: [19:23] MHA stand for? MHA is mandatory housing authority. Oh, okay. And so it's a fees that feeds that fund which allows the, technically allows the city to buy more affordable housing. But it, the, the fees is essentially having a counter effect of what they were supposed to do, which is create more housing, and hence by creating more supply, create more affordable housing. But because of the fees, builders just shied away from it because you're now having to pay, one, this huge fees even to start construction, and you're paying this upfront. There are other areas of the country where the, these fees are charged, but the builders can postpone that when the project sells so it doesn't put a huge financial burden on the builder upfront. Again, it's the fees and how it is implemented, both are the issue. Well, let- that's a different topic. We'll get into it hopefully in a different podcast.

Christian: [20:14] We, we did briefly talk about that in our One Sea- or Seattle One Plan unpacked episode, episode 132, which we'll talk about that way more later, very soon in this episode as well. But yeah, that's, that's a big thing. If the city did make those fees or charge those fees once the project was sold out, meaning all the units had been sold, that would make way more sense. But as developers, what they do is they're lending this money. They're getting a big loan for this money, and they have to start paying interest as they take that loan, and they take that loan payment in draws. So they'll take one big chunk at the very beginning, and then each time they build the property more and more, they're taking more and more draws and lending more and more money and-

Shannon: [21:00] Borrowing … Speaker: borrowing- Yeah … more and more money. Sorry. And the more that they borrow, the more that their monthly payment goes up. And if they can, you know, postpone that extra hundreds of thousands of dollars in fees to the very end when they have profit, maybe that would make more sense. I don't know. Just don't charge the fee.

Christian: [21:18] I mean, I'm all for affordable housing. I know, I know. I mean, yeah, but you gotta do it in a way that's gonna be a win-win, 'cause-

Shannon: [21:24] Just, yeah

Christian: [21:25] clearly what they do right now is not working 'cause it's not creating- Nope … what they intended. So you always gotta pivot, and that's the stuff that you just don't know. You don't know how things are gonna pan out, and this is where government, big government sometimes can be a hindrance because they don't pivot very quickly. They're like, "Well, this is the plan that we came up with, and it's not working, but we're just gonna keep doing it." So maybe they need to switch that up a little. All right. So let's move on to our next topic. Let's talk about current mortgage rates. So as of today, March 28th, 2025, mortgage rates have been fluctuating due to a whole lot of various economic factors , and it's crucial, uh, for potential home buyers to just stay informed about these changes, as they can really impact your affordability as a home.

Joanna: [22:10] Absolutely. I mean, even a slight change in mortgage rates can affect your monthly payments a lot, and the overall cost of a home. So it's advisable for your buyers to consult with mortgage professionals to understand how current rates align with their financial situation.

Varun: [22:26] Yeah. And as we spoke about earlier, right? Uh, Redfin being acquired by Rocket Mortgages, that will have a shift in mortgage offerings and services. But do remember, we've talked about this at the home buying class and in a lot of our previous episodes, if you want to compete and get your offer accepted, often big banks are not the best. Go to your local credit union or your local small bank, and they'll probably be able to close sooner and give you a better rate.

Shannon: [22:51] Yeah. I th- I think when rates are fluctuating, like Joanna said, it's super important to continue to update what you can afford, 'cause sometimes that does change, and it can change rapidly. I noticed, and Christian, correct me if I'm wrong, like from a selling standpoint, like when we're selling people's homes or different investors' projects, when rates do something, it can make an impact on how many buyers are out there. So it's, it's definitely something we keep a close eye on 'cause it's ever-changing.

Christian: [23:20] Yep. Yep, that's totally true. I mean, currently, for those wondering, rates are around 6.75%-ish, and they've been hovering a little bit lower and a little bit higher by about, I don't know, I don't know if they even went down to 6.5, 6 and a half, or up to seven, but they're, they're hovering right around that. But they've been around the 6.75-ish range lately. So just to get you on, on… or up to date on where we're at with

Shannon: [23:47] that. Has anybody heard any good predictions about what's next for rates? Or are we kind of just no one knows what the heck's going on?

Varun: [23:53] At this point, I don't think anyone knows. Fed hel- held the long-term rate co- or the, or the, their prime rate co- uh, steady, and so it- it's right now anyone's guess on what rates are gonna do. I think it's more or less the rates are gonna be s- steady for most of the year.

Christian: [24:11] Yep. Yeah, and even if people did predict, like- With Trump doing all his things, it's- Yeah … it's, it's too unpredictable.

Shannon: [24:19] Yeah. Well, I feel like last year everyone was wrong about what they predicted.

Christian: [24:23] Yeah, exactly.

Shannon: [24:24] Yeah.

Christian: [24:24] All right. So let's move on to our last topic, the One Seattle plan, also known as the Seattle I plan. People talk about it both ways. Varun, can you give us a quick breakdown of what that One Seattle plan is?

Varun: [24:37] Yeah. So the, uh, One Seattle plan was Seattle's response to two laws that were passed by the Washington State government back in 2023. The two laws essentially said every single family zoned lot in the state should allow for two DADUs. Again, this applies to cities with certain population thresholds, and Seattle being one of the biggest cities, it applies to Seattle, Redmond, Kirkland, some of these, uh, bigger cities. But the law says two DADUs on every lot in the state in these high populous cities. And then the second law was allowing four residences or s- homes on every single family zoned lot, again, in these larger cities. And up to six if they are quarter mile walking distance from a major transit stop, like a light rail station or a rapid bus line. And so those were the two laws, and Seattle took those… Enactment deadline for Seattle is end of June, so these have to go into the land use code on July 1, 2025. Uh, and so S- That's

Christian: [25:40] statewide that every city has to have these new rules in r- in place, depending on-

Varun: [25:44] Yeah. Some cities are- … Speaker: populations, but yeah. Yeah. And some cities are ahead of the curve where they've implemented some of these already. I know Everett has started allowing two DADUs, and there are other cities that are doing different variations of that. But what Seattle's response was taking the state laws and going a little bit above and beyond and allowing more density, hoping to increase the housing supply in the middle housing bracket. Not the high-end houses and not your starter homes, but the middle housing where there is a true gap in the city. And pushing for more density along the rapid transit corridors where the city's already invested a ton of money in developing these transit services. So that was kind of nutshell description of what the One Seattle plan is.

Christian: [26:28] Yeah, and I do wanna point out, too, that this plan outlines the city's growth and development strategies for the next 20 years. So it's not just like a real quick, "Hey, this is… You know, we're gonna change it for a little bit and then redo it." No, this is the plan for the next 20 years, so it's a really big deal. Because it's such a big deal, there's been some legal challenges to it from some people that don't want this in their backyard. The Final Environmental Impact Statement, the FEIS, for the One Seattle plan was released on January 30th, 2025, and that initiated a 14-day appeal period, which stopped, concluded, on February 13th. During this period, several neighborhood groups from areas such as Hawthorne Hills, Madison Park, and Mount Baker filed appeals. alleging that the city's environmental review was insufficient. In response though, the Seattle City's Attorney's Office filed a motion to dismiss those suits, and the reason why was because they… What was it, Varun? Do you remember what she said? The, Anne Davidson, the city's attorney

Varun: [27:32] Uh, that for the grounds to dismiss was, hey, they already published a very comprehensive environmental plan, and they did take into consideration all the reasons for the lawsuit into th- this whole plan. And so the argument was, we've already taken into all of this, uh, all of these, uh, factors into account, so there is no reason to stop this from going into the land use code, and so they should dismiss it. But, uh, again, I don't know the latest on where the lawsuit is as of today.

Christian: [28:00] Yeah. Uh, there ha- I don't think there's been any updates. This all happened in the last week where the city dismissed it, so we'll just keep tracking it for, for more as, as things go on. Are there any public hearings coming up?

Varun: [28:11] There is a public hearing coming up on May 21st with a deadline for appeals on May 30th. Again, if we didn't have a rollercoaster ride, it wouldn't be that fun, so grab your popcorn and see what happens.

Shannon: [28:22] Oh, man.

Joanna: [28:22] Yeah. I mean, if this passes, it will give lots of opportunities to investors to build multiple units on each lot. And I also feel like it'll be great in a lot of ways, and I see why other, in other ways it's very scary for people, especially, you know, I'm surprised I didn't see Magnolia on that list of, you know, um, neighborhoods that are against what this is gonna, you know, potentially do to the look of the city and to the look of different neighborhoods. You know, Discovery Park being right here, and it's such a cherished little jewel. Believe I live over here. I am very very, um, in love with the park, and some of the things that have been proposed to be built right outside of Discovery, or actually it's like kind of right in there, uh, they're, they make me very nervous. I don't love that. I'm wondering if there's gonna be a hearing on that. I think there was. I probably missed it because I'm terrible. Um, but yeah, so I get, I get the hesitancy, but I also like the flip side of more affordable housing, and you can't get that until you have more houses or more homes to sell-

Christian: [29:30] Exactly to

Joanna: [29:31] people.

Shannon: [29:31] Yeah. We need

Christian: [29:32] inventory.

Joanna: [29:33] It's tricky.

Shannon: [29:33] Yeah.

Joanna: [29:33] It's very tricky.

Shannon: [29:34] I mean, I know from an investor perspective, they're very excited about this change and just to be able to develop more units on every lot. I do wanna say, like, I think there's a lot of investors who, as we know, we all wanna be the person that figures something out first and, like, gets to buy something undervalued. I do, at this moment, like worry a little bit just 'cause every jurisdiction's gonna make their own way to respond to this, and I don't know that I would buy something that only makes sense if the laws plan- pan out a certain way right now. 'Cause I just think a lot of things are still in flux. So from an investment standpoint, if you can buy something and it makes sense under the current laws, and then if the laws do pass in the way they're supposed to or currently laid out, you might have a bump On that property, then I think that's great. But I don't… I worry about people buying stuff with the expectation that a law will do something, and I would worry about buying stuff with that expectation. I think the smarter play is kind of see what's going on, and then wait and see what these municipalities say, 'cause they could also create lots of fees you don't expect. They could create a permitting hell for you. You just don't know how this is gonna pan out and how it's gonna play out.

Joanna: [30:53] I have a quick question for the three of you guys, Shannon, Varun, and Christian. As you're investors and you each own a single family home, how would you feel about your next door neighbors having their house torn down to build a multifamily building?

Shannon: [31:13] I would be fine with it.

Joanna: [31:14] I'm potentially on both sides.

Shannon: [31:15] I think it's fine. I don't have an issue with that.

Christian: [31:17] Yeah. I mean, that, those are the rules, and we do want and need more affordable housing in Seattle. So- Even if I don't love it, I'm not gonna fight it because I also agree for the bigger picture, we do need more affordable housing. Like, it's not… I don't like that people that work, like I, Shannon and I, yesterday was opening day for the Mariners. We worked for the Mariners 20 years ago, plus years ago, more than that actually. It's where we met. And, you know, we were making minimum wage. And we, if we were making minimum wage working there, there's no way we could afford to live in Seattle. We would have to live in the outskirts, travel in on public transit or drive, and then pay to park and do all that stuff, which is what we did when we did work there. But that's not the greatest way to live, and no one really enjoys that. So adding more affordable housing for everyone to be able to live closer in to where the jobs are, I think is a big deal. And while I might not love the fact that now there's, what was one single-family house, now there's four or potentially even six units on that one, for the greater good, I'm okay with it because that's what's going to make things more affordable for everyone, so.

Joanna: [32:40] What about you?

Varun: [32:41] Yeah. I, so affordability is also subjective. I'll give you an example. You and I live in Magnolia. In Magnolia, a new single-family home, even with a ADU and a DADU, so density, so already three units on that lot, the new single-family home, new construction is probably 1.5 to $1.8 million. Counter to that, Christian and Shannon sold a DADU, uh, la- late last year, 925, under a million dollars. So it is affordable when you compare it to a million and a half. You're getting a 33% discount on the, on a new construction, and still you're living in one of the best neighborhoods in the city. The same way, having more but smaller homes will be needed so that we don't have a urban sprawl.

Christian: [33:25] Mm-hmm.

Varun: [33:25] I, I, I had friends at Amazon who had to move to Bothell to be able to afford a home, and now they're commuting an hour each way. With these smaller homes, if they're willing to compromise on some square footage, they would be able to live in the city and have a lesser commute, which means they spend more time with the family, which actually adds value to that neighborhood because now you have more probably families, more people outdoors that you can see. You don't have people in the cars all the time. So there are multiple ways to think about this. I don't think I'm opposed to- both my neighbors getting the single-family homes torn down and building four to six units, I think it's gonna add more value to the neighborhood in the long run and the city in general. I think that there's a broader picture that people need to consider before they think, "Oh, this is just not good for the city. It's gonna kill the character of the city."

Joanna: [34:12] I hope so. So- Because I am touring some buyers right now, and there's a single-family home, very… Like, this is just happened two days ago. I toured them at this house. On both sides of the house, one was an apartment building on one side of the… It was like the up house. There was an apartment building on one side. There was a, what kind of looked like a dadu right in the back, like right on top of it, and to the other side was townhomes. And across

Shannon: [34:39] the

Joanna: [34:39] street- Wait a minute. What?

Shannon: [34:40] That, that means they have a lot of opportunity probably because of the zoning of that house. That's, like, a good, that's a good deal for development. Hold on.

Joanna: [34:49] It was the, it was

Shannon: [34:50] a two- Joanna, what's the address? No.

Joanna: [34:52] Right? Two bed, one bath house, adorable little bungalow house, like, in White Center, and the, the biggest turnoff to these buyers and to myself was that on every side there were th- wh- it was this scenario. And they even had a little yard, front yard, and a teeny little space in the back, but, you know, enough yard. Kind of like a townhome situation. But, like… So I'm just saying maybe that will make something like that seem more appealing.

Varun: [35:21] But then the counter to that is that buyer, if they don't buy that single-family home with a yard that actually is a single-family home, will either end up in a condo Or end up in a town home where you have, you have maybe two shared walls.

Joanna: [35:37] Oh, in the city- Right … yeah, for sure, but not where actually found other ones we're touring today. But that's beside the point. I just-

Varun: [35:44] Yeah … it might make things more appealing. It's a commute thing, right? Like, it's, yeah, it's a commute thing. So for, it is very easy for someone who already owns a house in the city to make a comment that affordable housing is great, but hey, it shouldn't be close to where I am.

Joanna: [35:56] Right.

Varun: [35:57] But for people who want to not commute as much, work in the city, and can't afford the million, $2 million price points, for them to be able to afford something that is seven, $800,000 and still be in one of the better neighborhoods in the city, I think that's the goal that we're trying to achieve. Affordable housing- Yeah … doesn't mean it's gonna be a cheap 300, $400,000 house. It's still probably going to be in line with what Seattle prices are, which are unfortunately high compared to other parts of the country. But it'll still allow a lot more people to commute less, work closer to where they, uh, live closer to where they work, and spend more time with their families. That's what affordable housing is trying to get to.

Christian: [36:34] Yep. And I will point out, too, we've talked about affordable housing, and then we brought up our Magnolia DADU that sold for 925. Those two sentences don't really make sense together. No.

Joanna: [36:45] They don't.

Christian: [36:45] Because, and I will, I, I admit that, and it's the Magnolia property, that's a very high-end neighborhood that that's the highest DADU we've ever sold, and it actually set a record for prices in Magnolia. So that's an abnormal, very high-end sa- sale price for a DADU. Most DADUs are between, I would say, 750 and 850 maybe, but there's some that are even less than that. They're in the 700 range. You're gonna go to more South Seattle or maybe parts of West Seattle.

Joanna: [37:16] Actually, there is a DADU in Magnolia right now that is having a problem selling. It's been on the market for quite some time, and it's now, I believe, at 650. It might have even been marked lower.

Christian: [37:25] Wow. So yeah, there are… We only gave one example of a price of a DADU, and I just wanted to clarify that that is not the normal price. They're usually much less.

Joanna: [37:35] Correct.

Varun: [37:35] Yeah, but even in that example, Christian, I counter that by saying- You did,

Christian: [37:39] yeah

Varun: [37:39] you, you, you, you sell the, you sold a single-family home on that same lot for 1.2. So you're still seeing at a $200,000 lower price, new construction, three-bedroom home. So if you're a young family who wants to be in a great school district, great neighborhood, walk to Discovery, walk to your grocery store, under a million dollars- Yeah that's a really good deal.

Christian: [38:00] Yep. Agreed. Agreed. It all depends on what lens you wanna look at it with, and-

Varun: [38:05] Yeah, yeah. Exactly

Christian: [38:06] Yep. Anything else you guys wanna talk about in terms of the Seattle One or One Seattle?

Joanna: [38:12] Not if we wanna keep this under an hour.

Christian: [38:15] Okay. Well then, I wanna wrap this up. I think this was an awesome conversation. It was really fun going over all this news with you guys on the podcast. As a team, these are the conversations we have all the time. We meet three times a week generally, but once in person, and when we do meet in person, we just talk and talk and talk, and this is kind of you getting a, a, a glimpse into the conversations that we have- as a listener. So if you like this one, please leave us a comment. Let us know so that we can keep making these types of podcast. If you, if you appreciate it, like it, comment, share it with your friends, get this out there to others so that we can keep making it. 'Cause we wanna make the content you want to listen to. That's it for this episode of the Awesome in Seattle podcast. Thank you Joanna, Varun, and Shannon for all of your valuable insights, and thank you to our listeners for tuning in, and we will see you next time. Until then, stay awesome.