If you’ve owned a house in Seattle for a while, you know the letters: plaintive pleas from couples with names like Brad and Janet desperately searching for a home just like yours where they could fulfill their dreams and raise their exemplary children (Tyler aims to become a concert pianist, Meghan wants to be a doc with Doctors Without Borders). In the housing booms that peaked in 2005 and 2022, when listings commonly sparked bidding wars and sold for tens of thousands of dollars above asking price, would-be buyers sold themselves to try and buy a house. Agents meanwhile pestered incessantly with phone calls and texts, trawling for listings.
Last year the pleas and calls briefly eased, as interest rates soared and a recession and housing bust seemed to loom. Now they’re back, along with rising prices. The other day I got a letter from “Jen and Ivan,” who’ve “spent the last 3-plus years dreaming of finding the perfect home to call our own,” where Jen can “delight at being in such close proximity to wildlife and nature” and Ivan can “support the surrounding community at the local coffee shops, bookstore, and other small businesses.”
Now the Jens and Ivans have professional competition. Last July and again in August I received this postcard from a “small business” owner named “Julie” who also wants to buy my house. To show she’s the kind of person I would want to sell my house to, Julie includes a photo of herself—not too young, not too old, in a sunny meadow, with a warm smile, wrinkled T-shirt, discreetly torn jeans, and a winsome collie. (Cute, stalwart pooches—never a pitbull or toy poodle—have become essential accessories for candidates and others trying to induce trust and rapport. A dogless author I knew borrowed a retriever for his book-jacket photo.) No hardboiled real estate investor she.
So I stopped by the postcard’s return address, a first-floor office in a looming five-story bunker near Northgate where I used to go to get my mortgage refinanced, and asked for Julie. There was no Julie there until I insisted on seeing her rather than selling my house to anyone else, and then there was a Julie but she was out and would I like to speak to someone else on that team? No thanks, I said, snagging a brochure on the way out.
That’s how I learned that “Julie’s small business” is actually one of 1,100 brokerages in the global Keller Williams Realty empire, “the largest real estate franchise in the United States by sales volume,” with “over 200,000 associates worldwide as of 2022.” It’s also a link in the chain of Ben Kinney Companies, which includes 11 brokerages and 1,400 agents “servicing over seven counties in Washington State, in addition to the master franchise rights to all of the United Kingdom.” There’s got to be a Julie in there somewhere.
Across the country, investors have acquired a growing share of America’s single-family homes. In 2021, they completed a fifth of U.S. home purchases. This massive infusion of capital has driven soaring price appreciation, outpricing would-be first-time homeowners and shoring up the market against the predictable bust as interest rates rose. It also consigns an ever-larger share of Americans to renting, cutting tens of millions off from the essential engine of intergenerational wealth accumulation.
This effect is especially pronounced in Seattle, once a model “middle class” city with relatively high degrees of economic equality and home ownership (67 percent homeowners in 1960). Today Seattle has as many homeowners as it did then but 200,000 more residents: the U.S. Census Bureau finds that in 2021, only 45 percent of Seattleites were owner-occupants, while 55 percent were renters. This decline in homeownership is especially pronounced but hardly confined here: The Bureau reports that from 2009 to 2015, in the wake of the Great Recession, 46 states saw statistically significant declines in homeownership. By 2019 homeownership had recovered partially in 31 of them but, on average, was still 3 to 4 percent below the peak years of 2005 to 2009.
Though it’s the top brokerage franchise, Keller Williams is a bit player (“a gnat,” in one veteran realtor’s words) in the grand game of residential property consolidation. Hedge funds, institutional investors, sovereign wealth funds, even Alaska’s state fund have piled into the American housing market, joining and outbidding traditional smaller landlords. Billion-dollar Blackstone, Inc., “the world’s largest alternative investment manager,” and the even larger BlackRock have taken turns as the largest purchaser of single-family homes. In 2021 24 percent of homes sold went to investors; in the last quarter of that year, institutional investors’ share topped 18 percent.
These investors have proven prescient—or influential—as legislatures in state after state, goaded by the development lobby and housing advocates, have moved to eliminate or drastically curtail single-family zoning, allowing more density (and profit) on formerly constrained lots. Housing availability and affordability are the stated goals, but the results are more ambivalent. In Seattle, this typically means replacing a modest older home (and the trees around it) with three “affordable” townhouses priced at $700,000 to $800,000.
Even homeowners with no interest in selling or buying are incessantly reminded of the transformed home market. With housing inventory—the number of homes for sale—at its lowest level in 40 years, investors and brokers are again clamorous in their search for available properties. Christmas provided a welcome break in the daily spam calls and texts, but I know they’ll soon be back. And “Julie” has either changed identities or gotten competition in her own office. Two months after her last postcard, I got another from “Jamie” at the same address, offering a quick and easy all-cash offer, no tricks or hassles.” This time, no pooch.