JUNE 13, 2025
Issue 4
This week, we are going to lead with the Middle Housing Q & A because it is a GREAT question and it had me going down a rabbit hole of research...and I am excited to share it with you!
Q: I have a listing right now with middle housing development potential. I think it is priced right (I have evaluated it several ways) and have provided ample information to get developers excited, but it is not getting any bites. Any suggestions?
A: You are not the only one in this predicament! It is definitely trickier to evaluate the market when selling this type of product, so let's take a closer look at the market mechanics to see what is going on and your possible paths forward.
COMPETITION
A quick look at the MLS indicates that there is a lot of building potential on the market - both in terms of land listings as well as residential listings. With cities updating their building code to allow for duplexes up to possibly sixplexes as well as a selection of the nine types of middle housing, this is a new opportunity that savvy real estate agents are evaluating before putting a property on the market and marketing once available for sale. Unfortunately, there isn't a handy box one can check in the MLS for "middle housing building potential" - it takes scrutiny of each listing, but there are some tricks like searching for "1110", "middle", and "plex" in the marketing or broker comments to find them.
In general, there is a lot of development potential on the market at the moment - competition is high - and I suspect it will grow as more attention is paid on this with the zoning changes with the One Seattle plan. This is where you really need to tune into supply and demand - this particular moment in time.
INFORMATION
The number of listings available also means there is more to evaluate with each listing, so doing a good job of the research and providing that via supplements is important. You must try to do some of the feasibility work for your potential buyer/developer up front.
The particular listing in question has done a good job of this, even providing pre-designed product so developers can get a sense of what can be built here.
DEVELOPER MINDSET
Prior to now, especially in areas that have relaxed their ADU laws after the state law changed in 2023 and prior to areas having to adopt those changes (June 30, 2025), developers had been flocking to those areas to build this product since it is 1) in-demand and yielding a strong price point, 2) land available to build, 3) and, in some cases, easier to approve.
In fact, I was just at our Government Affairs meeting for the Whatcom County Building Industry Association and a builder there just indicated he was able to get an ADU permit in only two weeks. Given the other delays we are seeing with permitting, this is unheard of, but with the new regulations indicating that only an administrative review can occur for an ADU, that is a compelling reason for wanting to build that product.
Because so many developers have been flocking to that product, consider that developers may be maxed out on their developments at the moment. Sure, if a screamin' deal comes along, they will jump, but it is likely that you have priced the property to be competitive in the market, not sell at wholesale prices.
In fact, I took a look at the City of Seattle Residential Permit Interface, just to get a better idea of what is going on...
