Today, I am starting a new series called the “PK Series,” where two or more cities will compete in a “PK” to compare the differences between cities in various aspects such as employment opportunities, transportation, school districts, policies, and overall quality of life. The goal of this series is to help Chinese friends clarify the housing characteristics of different cities and assist people in choosing a city to live in based on their needs and preferences.
In the first episode, I will compare the tech hubs of Seattle and San Francisco to see which city might be more suitable for you.
Why compare San Francisco and Seattle? Because both cities are major metropolitan areas on the West Coast of the United States and are known for their tech industries. Many individuals look for employment opportunities in tech companies or seek housing investments in these cities, so it’s common to compare the differences between the two. Let’s start by looking at the real estate market overview of San Francisco and Seattle, and later compare the markets in the Greater San Francisco Bay Area and the Greater Seattle Area to provide a comprehensive understanding to our audience.
In terms of housing prices, San Francisco has long been one of the most expensive cities in the US, with a median home price of around $1.3 million. However, due to remote work during the pandemic and serious urban crime issues, there has been significant population outflow, causing a temporary decline in housing prices. Nevertheless, recent trends indicate a rebound, especially with the new mayor, Daniel Lurie’s efforts to revitalize the city, signaling a potential return to its former glory.
In Seattle, local housing prices are also high but relatively cheaper compared to San Francisco, with median prices ranging from $850,000 to $1 million. Seattle’s housing market has remained stable in recent years, supported by tech giants like Amazon and Microsoft, and the city experiences less urban crime issues compared to San Francisco, resulting in more stable housing demand.
When it comes to rental yield, although San Francisco has higher rents, the property prices are also higher, resulting in lower rental yields compared to Seattle. Therefore, if rental yield is a consideration, Seattle might be a more suitable option due to lower home purchase costs.
For example, if we do a simple calculation, assuming buying a San Francisco investment property at $1.3 million with an annual rent of $48,000, the rental yield would be approximately 3.69%; while purchasing an investment property in Seattle at $850,000 with an annual rent of $36,000 would result in a rental yield of around 4.24%.
In terms of real estate taxes, San Francisco has a lower property tax rate at around 0.73%, while Seattle’s property tax rate is approximately 1%. Additionally, the maintenance costs of properties are slightly cheaper in Seattle compared to San Francisco, which should be considered when making a detailed comparison. However, one crucial factor to note is the rental policy aspect, as both Seattle and San Francisco have long been politically left-leaning cities, leading to laws that tend to favor tenant protection with significant inadequacies for landlords, especially in San Francisco. There have been numerous reports on this issue, and those interested can delve deeper into understanding the nuances.
Next, let’s compare the overall Greater San Francisco Bay Area and the Greater Seattle Area. However, I will focus on cities with a large Chinese population for this comparison, while cities with a lower Chinese population percentage will be briefly skipped.
First, let’s examine the security situation in the two metropolitan areas. In the overall crime rate chart, it is evident that San Francisco has a significant crisis in terms of crime rate, ranking among the top twenty in the U.S., particularly with a high number of property crimes, such as car break-ins being very common. Crossing the Bay Bridge to the opposite side to Oakland also shows a high crime rate, being labeled as one of the most dangerous cities in the U.S.
Both cities have had many early Chinese immigrants, but in recent years, fewer new immigrants choose these areas. However, in South Bay’s San Jose, the crime rate significantly decreases. In fact, the entire Silicon Valley region has very good safety, with Fremont in the East Bay being repeatedly named one of the best places to live or retire.
Moving to Seattle, the city also faces issues with a high crime rate, mainly property crimes, but lower rates of violent crime. Additionally, Bellevue and Redmond are considered high-income, well-secured cities. Bellevue, in particular, has many affluent families and is a community with excellent security. It has the second-highest Chinese population in the U.S., following closely behind the San Francisco Bay Area. Redmond, on the other hand, is the location of Microsoft’s headquarters.
In terms of safety considerations, Cupertino, Palo Alto, San Mateo, Pleasanton, and Dublin are recommended in the San Francisco Bay Area; while in the Greater Seattle Area, cities like Bellevue, Redmond, Sammamish, Kirkland, and Issaquah stand out. Generally, avoiding the downtown areas of San Francisco and Seattle and moving to the outer cities would offer a better security situation.
Secondly, let’s discuss the housing prices comparison. Generally, housing prices in the Bay Area tend to be higher than in the Greater Seattle Area. A million dollars can be considered the basic price point in the Bay Area, with San Francisco’s median price being over a million dollars and locations like Cupertino and Palo Alto in Silicon Valley requiring two to three million dollars or more.
In Greater Seattle, the median price in the downtown area ranges from $850,000 to $1 million, while in locations like Bellevue and Redmond in the East, the median price is around $1.3 million, even higher in Bellevue. Additionally, in Sammamish, Kirkland, and Issaquah, the prices are around $1.2 to $1.3 million. Sammamish’s prices are slightly higher, and while the Chinese population percentage might not be as high as in Bellevue, there has been a growing trend in recent years.
On a side note, the Greater Seattle Area can be divided by Lake Washington, with Seattle in the West side, which is more developed with many historic houses. On the other hand, the Eastside, consisting of several cities, like Bellevue, started development about fifty years ago, resulting in newer and well-planned communities that have gained popularity among Chinese friends due to their infrastructure and spacious homes.
In the third comparison, let’s discuss the Chinese communities. The Bay Area tends to have a higher percentage of Chinese residents compared to the Greater Seattle Area, with many cities having over thirty percent Chinese population, such as Cupertino, Fremont, and Daly City. Overall, the South Bay Silicon Valley area attracts many new Chinese immigrants, leading to numerous Asian supermarkets, Chinese shops, restaurants, tea houses, and Chinese language schools, making it easy to access various Chinese services.
In Seattle, as mentioned earlier, the eastern side has a slightly lower percentage of Chinese residents compared to the Bay Area, but this percentage is increasing rapidly in recent years, leading to a gradual increase in various Chinese shops and services. Therefore, if you are looking for a seamless living experience with fewer language barriers, the Bay Area might be the better choice. However, if you are considering investing in Chinese businesses, Seattle’s rapid growth might bring higher profits in commercial enterprises with lower costs.
Fourthly, let’s compare the school districts. Both regions have many excellent public schools, but the Bay Area generally has more outstanding school districts compared to Seattle. For example, school districts like Palo Alto Unified School District, Fremont Unified School District, and Los Gatos-Saratoga Unified High School District are highly esteemed by the Chinese community and are considered among California’s top school districts.
In Seattle, Bellevue and Lake Washington are also known for their excellent school districts. People moving to Seattle, especially Chinese individuals, are often motivated to facilitate their children’s education in these exceptional school districts. These reputable school districts are mostly concentrated in the Eastside of Seattle, while the Bay Area has a distribution of excellent school districts across the entire region.
Fifthly, let’s compare the employment environments. The Bay Area, specifically known for Silicon Valley, is a hub for numerous tech company headquarters and research centers. However, the Bay Area is home to a wide range of companies, creating a comprehensive tech ecosystem. Moreover, the Bay Area excels in finance, biotechnology, and startup industries, making it a highly competitive region with high salaries, attracting many job seekers.
In Seattle, Amazon and Microsoft serve as the largest employers, with Amazon’s headquarters located in downtown Seattle and Microsoft’s headquarters in Redmond on the east side. Many other tech companies also have branch offices in the area. Seattle’s aerospace, retail, biotech sectors, and the growing field of AI are also areas of significant development.
In summary, the Bay Area offers more high-paying job opportunities and remains the most dense and mature tech region in the U.S. However, Seattle is often referred to as the “Second Silicon Valley,” rapidly attracting talent and offering a lower cost of living compared to the Bay Area, thus reducing economic pressure.
Lastly, let’s compare the rental situations in both regions. Overall, rental prices are higher in the Bay Area. For instance, looking at a one-bedroom apartment, rents range from $2,800 to $3,500 in the Bay Area and from $2,000 to $2,600 in the Greater Seattle Area. Rental prices can vary significantly in the Bay Area depending on the city – for example, Oakland might have lower rents due to lower safety levels. However, cities like San Mateo, Cupertino, Palo Alto, and Fremont generally have rents exceeding $3,000, with Fremont being a balanced choice for investment and self-living as it offers decent security, good school districts, and a sizable Chinese population, even though it is further from San Francisco and not within the Silicon Valley region.
In the Greater Seattle Area, rental prices have more stable growth overall, especially speeding up in the Eastside. The most expensive rentals are found in Bellevue, offering a high quality of life; downtown Seattle has slightly lower rents and attracts more students and young tech professionals; Redmond sees more family tenants due to its proximity to Microsoft; Kirkland enjoys more lakeside views and strong living amenities.
Regarding rental costs, the Bay Area ranks as one of the highest in the U.S, while Seattle sees slightly lower but rapidly increasing rental prices. The rental supply in the Bay Area is scarce in the city centers but is being developed in the suburbs, offering more supply compared to Seattle. Due to the expensive rents in the Bay Area, it can be challenging to many, even for middle to high-income earners, whereas Seattle is relatively more reasonable and friendlier towards young people, students, and young professionals.
In conclusion, which city wins this round of comparison? In truth, housing choices depend on individual needs, and financial circumstances vary. It is challenging to determine the best metropolitan area, as preferences vary. Some might find Seattle more suitable, while others might prefer San Francisco. For high-income individuals, cities like Cupertino and Palo Alto in the Bay Area or Bellevue in Seattle could be ideal choices. For the middle class, the East Bay of the Bay Area offers lower housing prices, while Redmond and Kirkland in Seattle could be cost-effective options.
Considering rental yield, areas like Renton and Issaquah in Seattle or Dublin in the East Bay cities of the Bay Area present good opportunities. For students or new immigrants looking for temporary residence, options like Oakland in the Bay Area, downtown Seattle, or cities further north in Seattle could be considered.