Few places exemplified Seattle’s tech boom over the past two decades more than the suburbs east of the city, with their lakeside mansions and twisting cul-de-sacs that lured affluent workers from the likes of Microsoft Corp. and Amazon.com Inc.
Today, a house in the hilly enclave of Sammamish asking $2.9 million has been on the market for more than 100 days, and the seller is offering to help with financing. Nearby, two homes right across the street from each other are listed for sale. On one initially listed for $2.2 million and on the market since April, the real estate agent’s sign has a new price of $2.09 million scribbled in ballpoint pen.
Homes languishing on the market are rare for the Seattle area, long attractive for its plentiful jobs, lush scenery and lower cost of living than San Francisco, its fellow West Coast tech hub. But after years of benefiting from Big Tech employment and the accumulation of wealth that came with it, the area is becoming a test case for what happens when both are being challenged at once.
Companies including Microsoft, Amazon and Meta Platforms Inc. have slashed thousands of jobs in the region as artificial intelligence upends the tech industry. At the same time, Washington is asking businesses and the wealthiest residents to pay more in taxes, including passing the first income tax in modern state history this year: a 9.9% levy for households earning more than $1 million annually.
The effects are starting to converge in the area’s real estate market, where pending home sales tumbled the most in the US in July, according to Redfin. At the top 5% of the market, pending sales tumbled 15% from a year earlier in the three months through July, the brokerage’s data show. Across the US, the luxury market is relatively strong, with a 2.6% increase in pending transactions over the same period.
Demand is particularly weak in the upscale suburbs that cater to the region’s wealthy. In the six most expensive Seattle suburbs, including towns such as Bellevue and Sammamish, homes priced over $2 million spent an average of 44 days on the market in the first half of the year, according to Jeff Tucker, principal economist for Seattle-based Windermere Real Estate. That compared with 25 days in the first six months of 2025 and just nine days in 2022.
“Buyers have no urgency,” said Eleanor Payne, a Seattle real estate agent. “Undeniably there are fewer people moving to Seattle than there was before.”
Payne has seen the shifts in the local economy up close. Her husband was one of the Microsoft employees who recently accepted the company’s first ever voluntary retirement program, which was offered in addition to the job cuts.
The real estate slowdown is all the more remarkable when compared with San Francisco, where an AI boom fueled by hometown companies OpenAI and Anthropic PBC has set off a wave of wealth crashing over the city. The median sale price of a San Francisco home recently reached $1.7 million, Redfin data show, while rents by some measures are catching up with New York for the most expensive in the US. Seattle rents are roughly flat from a year ago.
Seattle has its own share of AI growth: Anthropic is expanding its headcount in the city, while OpenAI already has hundreds of employees in neighboring Bellevue. But the level of investment in startups that create jobs is nowhere near that of San Francisco and Silicon Valley. In the second quarter of this year, the Seattle area attracted $1.5 billion for venture capital deals, compared to $98.6 billion for the Bay Area, according to a report from the National Venture Capital Association, using PitchBook data.
Washington’s tech economy is concentrated around Amazon and Microsoft, which together accounted for roughly 20% of the state’s economic growth in the decade after 2014. Those two companies are still growing — and planning on around $395 billion in global capital expenditures this year as they ramp up AI capacity — even as they are cutting thousands of jobs.
The region also has plenty of areas of growth beyond AI, with local hubs for aerospace, life science, cloud computing and gaming, said Laura Ruderman, head of the Technology Alliance, a Seattle-based nonprofit.
“We are not Detroit, where when you got laid off when all the car manufacturers were laying off workers, there was nowhere else for them to go, and we’re not Boeing of the 1970s, where when they laid off a whole bunch of machinists, there was nowhere for all these people to go,” Ruderman said. “There are plenty of places for engineers to go.”
Yet the fate of Seattle’s tech workforce is only one part of the calculation for its housing market, particularly at the highest end. For the state’s richest 10,000 households, the tax code looks entirely different than it did five years ago. A 2021 capital gains tax survived legal challenges and a ballot initiative to repeal it, and progressive advocates are gearing up to fend off similar threats to the new income tax, dubbed the “millionaire’s tax,” which would first be collected in 2029.
Lawmakers last year also raised the top estate-tax rate to 35% — by far the highest in the country — before lowering it earlier this year back down to 20%. It’s now tied with Hawaii for the highest rate. Some financial planners say their guidance to wealthy clients is to not die in Washington.
The tax code changes could affect Seattle’s draw as a tech alternative to San Francisco, said Daryl Fairweather, chief economist at Redfin.
“One of the reasons Seattle was so attractive to people leaving San Francisco in the 2010s was because it had zero state income tax,” she said. “If that changes, then maybe people will look to Nevada or Florida instead.”
Some major employers are also choosing to grow elsewhere. Starbucks Corp. this year announced a second corporate headquarters in Tennessee, which has lower taxes and labor costs. T-Mobile US Inc., based in Bellevue, is quietly shifting more headcount to offices in Kansas and Texas, according to a person with knowledge of the matter, and has laid off more than 800 workers in Washington state in the past 12 months. Meanwhile, prominent homegrown billionaires, including Howard Schultz and Jeff Bezos, have departed.
The debate over taxing wealth extends beyond Washington. In California, voters will decide in November whether to impose the nation’s first tax on billionaires’ net worth, a move that has already contributed to the departures of residents including Google’s Larry Page and Sergey Brin.
Washington’s progressive leaders have shrugged off high-profile exits, pointing to wealth that continues to accumulate in the region. Seattle Mayor Katie Wilson famously shrugged and did a little wave saying “Like, bye!” when asked at an event about rich people leaving. On the back of a strong stock market, the capital gains tax brought in $1.5 billion so far this year from more than double the number of households who filed in the past.
Advocates for raising taxes on companies and high earners say expanding the social safety net is the right thing to do in a state with one of the most expensive costs of living, especially as the Trump administration cuts funds for healthcare and food assistance.
Emma Scalzo, director of progressive coalition Balance Our Tax Code — where her online biography includes playing “the world’s tiniest violin for all Washington’s billionaires” — said her group is still pushing for additional business taxes and what would be the country’s first wealth tax on unrealized gains.
“The wealth in Washington is growing,” Scalzo said. “So my job and the work of the coalition is to really make sure that our tax code reflects our economy and how prosperous it is here.”
Washington had the fastest-growing state economy in the US in the first quarter of this year, expanding at a 4.5% annual rate, followed by California, at 3.7%. Yet Washington and California are among the states with the highest unemployment rates, at around 5%, showing the shifts in hiring and drivers of growth.
In Seattle proper, the most luxurious homes have fallen in value to where they were roughly 10 years ago, said Tere Foster, who has been selling real estate in the area for four decades. That’s an opportunity for buyers who have been waiting years to get a mansion on Lake Washington, particularly those with cash who can avoid relatively high interest rates.
A waterfront mansion originally built for saxophonist Kenny G was put on the market in 2022 for $85 million, at the time the highest price in the region’s history. It sold in May for $38 million. One of the most expensive homes currently for sale in the region was originally listed last year for $75 million and recently relisted at a 40% discount.
“For years we had all kinds of people moving into this area, and it brought jobs and new companies and everything,” Foster said. “I’m not sure that that is as attractive as it used to be anymore.”
Destination markets for the ultrawealthy have noticed an influx from the Northwest. Joan Levinson, a Realtor focused on the affluent area around Scottsdale, Arizona, said her office worked with just one client from Washington last year, but has shown properties to more than seven this year.
“There were just a lot of Washington state calls — high end, looking for a house for maybe between $10 million and $12 million,” Levinson said.
Near Las Vegas, about 24 of the 171 units at the Four Seasons Private Residences opening next year sold to people from Washington, according to Craig Eddins, the project’s executive director. He said one common thread is buyers seeking to leave the state before “a major capital event” — retiring, selling a company or cashing out a stock position — that could trigger Washington’s capital gains tax.
Payne said the area’s talent and infrastructure supporting large tech companies means Seattle will always be a draw. And some companies are still hiring, such as the data-center startup where her husband recently began his first new job after 16 years at Microsoft.
But she said the combined uncertainty in employment and local politics is shrinking the pool of buyers just as inventory is starting to pile up.
“How does that play into maybe someone who’s a little bit younger or is maybe going to hold back on upgrading because they don’t know what’s going to happen over the next two to three years?” Payne said. “I see it playing into the market psychology.”
This article was provided by Bloomberg News.