Why Bellevue and Eastside Home Prices Have Kicked Seattle’s A**: Key Insights for 2025

Home price growth in Bellevue and the greater Eastside has dominated Seattle for the last four years after nearly a decade of lockstep appreciation. What changed and what can we expect for 2025?

A Tale of Two Cities: Bellevue vs. Seattle Real Estate

The housing markets of Bellevue and Seattle have diverged dramatically in the years since the Covid-19 pandemic. While Seattle’s growth has remained steady, Bellevue and the Eastside have surged ahead, with home values there appreciating significantly faster. What’s behind this trend? Let’s explore the four key factors driving this phenomenon and whether we can expect it to continue.

Seattle vs Bellevue Home Price Appreciation: 2021 to 2024

1) The Tech Boom Fuels Eastside Demand

Pandemic-Accelerated Hiring

The Eastside (Bellevue, Redmond, Kirkland, etc) has solidified its position as a global tech hub, thanks to expansions by industry giants like Microsoft, Amazon, and Google. Notable developments, such as Microsoft’s $10 billion campus renovation and Google’s investment in Kirkland Urban, have brought more jobs to the area and attracted a highly educated, high-income workforce eager to settle nearby. More recent position trimming has temporarily hindered some of these workers, but has not been significant enough to slow the Eastside housing market. 

Rising Salaries and Stock Wealth

Eastside tech professionals enjoy higher-than-average salaries, and many have seen their stock-based compensation and other assets grow dramatically in value over the last several years. This financial boost has made them the most competitive buyers in a market with limited inventory. Outsized buying power combined with tech professionals’ preference for the Eastside, has driven up home prices in Bellevue, Kirkland, and other Eastside housing markets.

Top-Tier Schools Attract Families

For tech workers with families, access to high-quality education is a top priority, and Bellevue and Redmond deliver some of the best schools in the state. The Bellevue School District and Lake Washington School District consistently rank among the top in Washington, attracting families willing to pay a premium to live within these zones. This sustained demand has created a competitive environment where homes often sell quickly and above asking price.

2) Urban Exodus and Lifestyle Preferences

A Shift Away from Dense Urban Areas

The pandemic fundamentally reshaped buyer preferences. Many people sought larger lots, suburban living, and outdoor space, which are more accessible on the Eastside compared to Seattle. Bellevue, Redmond, and surrounding communities offered these benefits while still being close to tech hubs, creating the perfect balance for buyers. The multitude of high income individuals moving to the Eastside has led to a knock-on effect of friends and families following in their footsteps, increasing demand.

The Epitome of a Bellevue Home

Increased Relocation Interest

The Eastside’s suburban livability has drawn interest from buyers across the region and beyond. The combination of lower crime rates, excellent schools, and a robust local economy has made it a magnet for both local and out-of-state buyers. The tech sector in particular tends to attract wealthy transplants willing to pay more for homes in familiar feeling suburban areas. Other political and environmental factors have and will continue to attract wealthy transfers. 

Work-from-Home (WFH) Flexibility

Remote work policies introduced during the pandemic freed workers from the need to live close to their offices. Many chose the Eastside, drawn by its suburban charm and proximity to natural amenities like Lake Sammamish and Cougar Mountain Regional Wildland Park. The recent push for return to work mandates by some companies has caused some to move from farther flung suburbs like Mill Creek and Maple Valley, but has had little to no impact on the core Eastside market.

3) Seattle’s Public Image Problem

Political and Public Safety Concerns

Seattle has faced well-publicized challenges related to homelessness, crime, and public safety, particularly in its downtown core. Although some of these issues may be exaggerated—crime in Seattle has actually decreased in recent years—the perception of instability has pushed some buyers to consider the Eastside as a safer, more predictable alternative.

Seattle Public Education Woes

Seattle’s public education system compares well to other major US cities. However, its perceived quality has waned over the last several years, especially when compared to Eastside school districts like Lake Washington School District and Northshore School District. Seattle Public Schools have fallen out of favor due to diversity, equity, and inclusion policy misfires and unresolved budget shortfalls. While many Seattleites agree with SPS’s efforts in principle, they have rebelled against them in practice.

4) The Lock-In Effect and Supply Shortages

Low Mortgage Rates as a Barrier to Moving

One factor impacting home prices in Bellevue and the Eastside is the “lock-in effect“ created by historically low mortgage rates. Many Eastside homeowners refinanced or purchased homes during the pandemic when rates were at record lows, locking them into monthly payments that are now significantly cheaper than what they would face if they sold and bought another home at current rates.

30 Year Fixed Mortgage Rates “Lock in Effect”, Courtesy of Mortgage News Daily

Exacerbating the Supply Shortage

The mortgage rate”lock-in effect” is more pronounced in Bellevue and the Eastside due to the relatively higher home prices in the area compared to Seattle. The financial leap required for homeowners to move within the Eastside or upgrade to a new property has deterred many from selling, further exacerbating the already tight housing supply.

With fewer homes hitting the market, competition remains fierce, driving prices even higher. This dynamic creates a self-reinforcing cycle: low inventory keeps prices elevated, and high prices discourage sellers from listing their homes, all of which leads to a low-affordability environment for buyers.

What’s Next? Will Eastside Real Estate Continue to Outpace Seattle?

Factors Supporting Continued Growth on the Eastside

1. Tech Expansion: The Eastside remains a key growth area for tech giants, ensuring ongoing demand for housing. If the AI boom continues, tech employers like Microsoft must swell their ranks.
2. Top-Tier Schools: The appeal of excellent schools will continue to attract families with significant purchasing power, especially if Seattle Public Schools cannot improve their public image.
3. Land and Zoning Restrictions: Strict zoning laws and limited developable land mean housing supply will remain tight, keeping upward pressure on prices.

Challenges That Could Slow Eastside Appreciation

1. Affordability Limits: With Eastside home prices already sky-high, the buyer pool could shrink, slowing appreciation.
2. Seattle Recovery: If Seattle successfully addresses its public safety concerns, revitalizes downtown, and increases housing affordability, it could regain some competitive ground.
3. Economic Uncertainty: A downturn in the tech industry or broader economy could have an outsized impact on the Eastside, where many buyers rely on tech-sector incomes and stock packages. Historically, Eastside home prices have shown sharper contractions during economic downturns compared to Seattle.

Conclusion: A Strong but Moderating Market

While Seattle may see some resurgence, the Eastside is poised to remain the top performing market in the short to medium term. Its combination of economic opportunity, lifestyle appeal, and educational excellence makes it a highly desirable market. However, appreciation rates are likely to moderate as affordability caps are reached, and the market stabilizes around a “new normal.”

CAVEAT: Everything goes out the window if mortgage interest rates tumble below 6% in 2025. Stay tuned for more of our thoughts and predictions on what to expect from interest rates in the coming months.

Ready to Explore the Eastside Real Estate Market?

Whether you’re considering investing, relocating, or simply curious about current trends, the Seattle Eastside offers robust growth potential. Contact us today for insights into specific neighborhoods and strategies to navigate this competitive market!