Best Places to Invest in Real Estate in Washington

Home Search, Mortgages, Studies
You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here's how we make money.
best-places-real-estate-washington

Washington may be tucked away in the Pacific Northwest, but those looking to invest in real estate haven’t forgotten the Evergreen State. Two of the main reasons driving this trend: the state’s strong economy and its appeal to foreign buyers.

In recent years, Amazon and other companies based in the state have powered the economy’s growth. This has attracted money and talent to Washington, and has made Seattle the seventh-most popular place in the U.S. for venture capital investment, according to an analysis by Richard Florida of CityLab.

The state also has become a favorite for investors from China. According to a recent New York Times article on real estate purchases by Chinese, “roughly 51 percent of the deals were in New York, California and Washington.”

With an educated population — 31.9% of residents age 25 and over have at least a bachelor’s degree, topping the national average of 28.8% — and a household median income of $59,478 that’s above the national median of $53,046, Washington may continue to be an ideal place for real estate investment.

While keeping in mind that all investments carry risk, NerdWallet crunched the numbers to find the cities and towns that are likely to attract real estate investors in Washington.

Key takeaways

Columbia River communities are surging. Seven communities in the top 10 are in the state’s southwest or southeast and near the Columbia River. This investment is driven by the popularity of the state’s wine-growing regions in the east and the real estate boom in and around the Portland, Oregon, metropolitan area in the west.

Midsize communities dominate. The average population in the top 10 is 26,437, which is below the statewide average of 33,347. For those seeking smaller cities, three communities have populations under 10,000 in the top 10.

Fast-growing, affordable communities. Average population growth is 9.38% — well above the statewide average of 6.19%, and the average recent sale price per square foot is $118.10, which is 20% below the statewide median of $147.90.

Couple buying a house with a real estate agent

FIND THE BEST REAL ESTATE AGENT

Use our data-driven matching service to connect with the agent that’s right for you.

mortgage-calculator-house-afford

DETERMINE YOUR HOME BUYING BUDGET

Our affordability calculator lets you include factors like debt and savings to determine how much house you can really afford.

What we analyzed

Our analysis took into account several factors:

Market health. We looked at how quickly houses sold compared with other cities in the state.
Price per square foot. Weighting for affordability, we measured the price per square foot of housing in a city, averaging all of 2013 and 2014 to avoid seasonal fluctuations.
Ten-year housing price change. Averaging monthly price data since 2004, we examined the percentage of houses that increased in value over the past 10 years.
Property taxes. Using state data, we calculated the city and county property tax for each city.
Change in vacancy rate. We used U.S. Census Bureau data to see how vacancy rates have changed from 2010 to 2013.

Our list of 125 places in Washington doesn’t include cities and other communities with incomplete data and those with residency restrictions, such as American Indian reservations and retirement communities.

Click here to see more NerdWallet studies on Washington

Best places to invest in real estate in Washington

1. West Richland

Wine always makes everything better, and West Richland’s location in Southeast Washington’s Columbia Valley wine-growing region adds to this city’s investment desirability. West Richland — ranked second in NerdWallet’s Best Cities for Young Families in Washington — is a Benton County city of about 12,000 that has the state’s highest Zillow Market Health Score. West Richland saw its vacancy rate fall 5.5%, our top 10 list’s biggest drop, since 2010.

2. Prosser

Prosser is a Benton County city of 5,752 with wine industry connections, including wineries and events, such as the Prosser Art Walk & Wine Gala and Prosser Wine & Food Festival. Although it is the smallest city in our top 10, Prosser recorded the strongest growth in price, with an average of 61.68% of properties increasing in value since 2004.

3. Pasco

Pasco ranked in the top 20 in NerdWallet’s Best Cities for Homeownership in Washington and Best Cities for Millennial Job Seekers in Washington. Pasco, the Franklin County city of the Tri-Cities, is across the Columbia River from Kennewick and Richland — the other two cities in the trio. Pasco is the most affordable place in the top 10, with properties averaging $102.27 per square foot.

4. Walnut Grove

Walnut Grove is the highest ranked of the three Clark County places in the top 10. The city’s location about 14 miles north of Portland, Oregon, has helped power recent growth: From 2010 to 2013, Walnut Grove’s population shot up over 21%, the highest growth in the top 10. Meanwhile, Portland’s property prices in the past year have jumped 6.58%, topping the rate in Boston, Los Angeles and New York, according to the S&P/Case-Shiller Home Price Index.

5. Mount Vista

Mount Vista, the second community in Clark County and the Greater Portland area, is the home of Washington State University, Vancouver. This suburb has seen balanced growth in recent years, making it a quality place to invest in real estate. Vacancy rates fell 1.60% from 2010 to 2013, and the sale price per square foot, $124.21, is below the statewide median of $137.95.

6. Kennewick

Kennewick is the largest city in the top 10, with a 2013 population of nearly 75,000, and it has one of the best property markets in the state. Zillow gave Kennewick a market health score of 9.97, which is tied with Prosser for the second-highest mark in the state. Benton County, where Kennewick is located, has a property tax rate of about 1.28%, coming in under the statewide median of 1.30%.

7. Cheney

Cheney, home of Eastern Washington University, is a good place to invest in real estate. The city’s falling vacancy rates, which are down 4.0% since 2010, affordability — at a sale price of $106.37 per square foot, Cheney is below the statewide median of $137.95 — and a population growth rate above the statewide median all have contributed to the city’s strong property market. A warning: Be careful not to burn your retinas when cheering on the Eagles at EWU’s laser-red football field.

8. Mead

Mead, 10 miles north of Spokane, was originally developed as an industrial town around the Kaiser Aluminum smelter, but it has reinvented itself since the plant closed in 2000. The sale price per square foot in the past two years has averaged $134.74, the highest in the top 10.

9. Richland

The last Benton County city in our top 10, Richland is a prime destination for science and engineering jobs at Pacific Northwest National Laboratory — one of 10 U.S. Department of Energy labs. The highly skilled workforce has boosted Richland’s median household income 16% above the statewide median. When it comes to outdoor recreation, the region gets over 300 days of sunshine a year, a perfect setting for tourists planning to visit local wineries or play on the Yakima and Columbia rivers. Considering Richland’s strengths, it isn’t surprising that the city has one of Zillow’s highest market health scores in the state.

10. Salmon Creek

Salmon Creek is the third, and largest, Clark County city in the top 10. This community has seen a bigger drop in vacancy rate and a higher price per square foot than either Walnut Grove or Mount Vista. It also has easy access to hiking and wildlife viewing in the nearby Ridgefield National Wildlife Refuge. Its location 15 miles north of Portland means Salmon Creek residents have easy access to economic opportunities in this growing metropolitan area.

Check out this interactive map of NerdWallet’s top 10 cities for real estate investment in Washington. Click on an icon to see each place’s overall score.

 

Best places to invest in real estate in Washington (full data)

Rank Location Market health score (0-10) Change in vacancy rate Sale price per square foot Housing value increase from 2004 to 2014 City and county tax per $1,000
of assessed valuation
Score
1 West Richland 9.98 -5.50% $117.02 57.26% $2.83 74.55
2 Prosser 9.97 -5.40% $112.30 61.68% $4.22 73.02
3 Pasco 7.83 -2.40% $102.27 56.79% $3.31 69.83
4 Walnut Grove 7.50 -1.00% $120.17 53.26% $1.46 68.74
5 Mount Vista 8.46 -1.60% $124.21 53.01% $1.46 67.95
6 Kennewick 9.97 -0.80% $114.54 55.63% $3.42 67.82
7 Cheney 7.39 -4.00% $106.37 54.90% $3.68 66.61
8 Mead 8.41 -1.20% $134.74 53.53% $1.30 66.58
9 Richland 9.88 -1.60% $121.48 55.05% $3.91 66.50
10 Salmon Creek 7.54 -1.80% $127.90 52.50% $1.46 65.91
11 Lakeland South 7.43 2.30% $136.29 55.19% $0.97 65.17
12 Felida 9.03 -0.50% $139.73 53.39% $1.46 64.81
13 Barberton 5.90 -2.00% $129.41 53.35% $1.46 64.65
14 Wenatchee 9.57 0.40% $144.69 64.00% $4.06 63.88
15 Parkland 5.77 -0.60% $114.14 50.26% $1.50 62.40
16 Five Corners 4.79 -0.20% $121.32 53.81% $1.46 61.81
17 Fircrest 6.62 -6.50% $123.00 49.39% $4.14 61.53
18 East Wenatchee 9.55 2.30% $158.04 60.08% $2.93 61.08
19 Waller 7.28 0.00% $138.32 51.22% $1.50 61.07
20 Selah 8.76 1.00% $123.45 56.13% $4.30 61.07
21 White Center 5.69 -0.90% $161.35 53.88% $0.97 60.98
22 Ridgefield 7.96 3.00% $133.96 53.86% $2.68 60.76
23 College Place 6.07 -2.80% $128.04 56.11% $3.77 60.60
24 Minnehaha 5.60 0.00% $118.38 51.91% $1.46 59.86
25 Silverdale 5.34 -3.60% $149.77 48.20% $1.19 59.67
26 Gig Harbor 6.35 -4.90% $156.15 52.19% $2.80 59.62
27 Kirkland 9.00 -1.30% $248.67 58.78% $2.63 59.49
28 Orchards 6.32 3.00% $127.05 52.41% $1.46 59.41
29 Bryn Mawr-Skyway 3.36 -1.40% $148.96 54.69% $0.97 59.22
30 Duvall 7.89 -2.50% $184.37 55.52% $2.57 59.16
31 Centralia 3.71 -0.10% $99.04 51.37% $2.34 59.16
32 Bellingham 9.22 -0.80% $174.65 55.70% $3.01 59.03
33 Lakeland North 2.44 -2.30% $144.07 53.38% $0.97 58.71
34 Sunnyside 5.11 -1.00% $85.03 50.85% $4.84 58.49
35 Lake Morton-Berrydale 5.89 1.40% $155.68 55.55% $0.97 58.41
36 Lake Shore 6.36 1.40% $140.69 53.67% $1.46 58.33
37 Sudden Valley 9.38 7.50% $122.21 47.91% $1.16 58.28
38 Graham 2.67 -0.80% $117.66 50.66% $1.50 58.02
39 Yelm 3.48 -2.40% $102.52 45.66% $3.06 58.01
40 Edgewood 6.40 -3.80% $148.63 49.87% $2.99 57.88
41 Camas 8.73 -0.80% $144.90 54.23% $5.06 57.84
42 Ferndale 6.55 -0.40% $150.33 56.02% $3.27 57.73
43 Maple Valley 7.26 2.20% $156.72 54.80% $2.44 57.64
44 Ellensburg 6.31 1.30% $129.23 55.67% $3.41 57.50
45 Snoqualmie 8.56 -2.00% $187.97 54.55% $3.95 57.45
46 Bothell 9.39 0.40% $194.80 56.93% $2.53 57.34
47 Clarkston 9.62 0.20% $141.51 48.58% $4.15 57.23
48 Kent 2.96 -0.40% $136.61 53.20% $2.62 57.22
49 Grandview 5.40 -0.40% $89.79 50.78% $5.14 57.19
50 Battle Ground 6.53 1.30% $135.56 53.81% $3.43 57.07
51 Snohomish 7.34 0.20% $173.19 55.32% $2.09 57.00
52 Tukwila 5.35 -1.80% $127.19 52.68% $3.95 56.79
53 Yakima 6.52 0.20% $111.70 52.54% $4.88 56.73
54 Spokane 6.00 0.60% $115.72 54.51% $4.33 56.72
55 DuPont 4.13 0.50% $135.78 52.59% $2.72 56.50
56 Lynnwood 7.53 -0.30% $171.25 56.83% $3.11 56.35
57 Liberty Lake 6.43 2.80% $132.47 51.40% $3.11 56.28
58 Lynden 7.36 2.70% $138.62 51.54% $3.30 55.65
59 Sumner 5.69 1.80% $140.15 51.58% $2.12 55.55
60 Vashon 5.62 -4.10% $224.40 55.80% $0.97 55.43
61 Lacey 4.46 0.50% $121.05 48.21% $2.67 55.41
62 Enumclaw 5.48 0.10% $158.37 54.40% $2.43 55.33
63 Kenmore 8.88 1.90% $196.63 57.75% $2.54 55.26
64 Burien 4.36 1.00% $178.93 54.97% $2.57 54.97
65 Hoquiam 0.67 -0.80% $38.40 48.77% $5.13 54.95
66 Shoreline 8.40 0.20% $203.40 57.97% $2.57 54.79
67 Redmond 9.76 -2.30% $244.80 59.21% $2.60 54.78
68 Summit 4.41 3.30% $126.15 50.54% $1.50 54.67
69 South Hill 2.56 1.50% $116.53 50.30% $1.50 54.66
70 Sedro-Woolley 4.99 -0.40% $129.66 47.80% $2.85 54.66
71 Ephrata 2.09 -0.20% $88.51 54.74% $4.73 54.57
72 Walla Walla 5.51 1.10% $135.00 56.57% $4.03 54.54
73 Poulsbo 6.48 -1.20% $166.70 50.40% $2.88 54.37
74 Aberdeen 2.14 -0.50% $63.50 47.18% $4.67 54.14
75 Tumwater 6.34 0.50% $122.91 48.54% $4.49 54.04
76 Issaquah 8.53 0.20% $229.11 57.78% $2.17 53.98
77 Monroe 4.21 0.50% $148.30 52.83% $2.39 53.56
78 Sammamish 9.77 -1.00% $234.55 58.58% $3.38 53.53
79 Woods Creek 4.87 3.40% $157.32 55.74% $1.03 53.50
80 Newcastle 9.13 -2.00% $233.30 57.80% $3.17 53.28
81 Vancouver 5.35 -0.80% $137.57 52.92% $4.49 53.12
82 Spanaway 1.83 2.30% $115.63 50.25% $1.50 52.99
83 North Bend 8.42 3.60% $184.70 54.10% $2.58 52.82
84 Renton 5.64 -0.70% $164.48 55.44% $4.12 52.67
85 Kelso 2.85 -0.20% $104.15 51.11% $4.10 52.62
86 Puyallup 3.34 -1.00% $132.42 50.64% $3.31 52.41
87 Woodinville 9.18 3.10% $214.99 56.33% $2.13 52.35
88 Orting 2.28 0.90% $118.67 51.08% $3.10 52.31
89 Moses Lake 2.29 0.50% $98.60 53.36% $4.95 52.25
90 Stanwood 5.65 -0.30% $154.67 52.29% $4.25 51.93
91 Anacortes 9.65 1.80% $183.35 48.68% $3.41 51.90
92 Mill Creek 6.71 1.50% $183.40 56.03% $3.17 51.80
93 Mount Vernon 6.45 1.10% $137.95 49.38% $4.46 51.73
94 Arlington 3.45 2.20% $144.71 52.55% $2.41 51.52
95 Edmonds 8.55 2.40% $206.37 56.16% $2.64 51.47
96 SeaTac 3.22 -3.00% $148.39 53.13% $4.07 51.39
97 Lake Forest Park 8.92 2.30% $218.91 57.21% $2.49 51.38
98 Longview 5.44 1.70% $108.72 49.96% $5.47 51.04
99 Federal Way 2.38 2.30% $131.15 52.53% $2.37 51.03
100 University Place 4.25 0.90% $142.02 49.16% $2.94 50.84
101 Burlington 4.97 1.50% $142.58 50.70% $3.70 50.61
102 Bonney Lake 2.15 0.20% $137.52 51.86% $3.04 50.58
103 Des Moines 3.19 1.00% $150.07 52.40% $2.57 50.37
104 Marysville 3.22 0.40% $142.39 53.38% $3.75 50.29
105 Auburn 2.82 1.10% $130.88 51.75% $3.67 50.21
106 Olympia 5.18 2.10% $136.27 49.04% $3.88 50.19
107 Mountlake Terrace 5.37 1.40% $173.98 54.13% $2.87 50.15
108 Lakewood 2.05 2.50% $117.89 51.12% $2.94 49.76
109 Lake Stevens 2.32 1.50% $151.88 54.21% $2.63 49.53
110 Covington 3.20 4.50% $143.26 53.22% $2.50 49.28
111 Bainbridge Island 9.67 -0.50% $245.88 51.56% $2.50 49.16
112 Shelton 1.56 -1.40% $115.82 49.46% $4.60 48.55
113 Port Orchard 3.34 4.40% $141.50 49.87% $2.88 48.53
114 Bremerton 4.50 1.50% $134.34 47.57% $4.14 48.52
115 Mukilteo 3.13 -2.20% $198.23 55.60% $2.45 48.51
116 Everett 3.12 0.40% $153.36 54.72% $3.97 48.24
117 Oak Harbor 2.29 0.50% $136.71 48.63% $3.15 47.96
118 Normandy Park 5.26 0.60% $201.95 54.32% $2.57 47.96
119 Chehalis 2.92 4.40% $115.13 51.54% $4.01 47.64
120 Tacoma 2.60 0.90% $129.51 51.47% $4.74 46.83
121 Woodland 3.60 5.20% $130.73 53.73% $4.28 46.72
122 Port Townsend 5.43 3.10% $177.62 58.71% $4.75 46.03
123 Seattle 9.24 -0.60% $313.80 59.40% $2.77 42.63
124 Mercer Island 9.89 1.60% $336.84 58.57% $2.15 39.48
125 Ocean Shores 1.78 9.90% $111.74 41.29% $4.88 35.58

 

We analyzed 181 communities in Washington, but the final list of 125 doesn’t include 56 cities and other communities with incomplete data and those with residency restrictions, such as American Indian reservations and retirement communities.

Tax rates used in this study are baseline tax rates for cities and counties and don’t include other taxes, such as school taxes.

Methodology

The investment score for each city was derived from the following measures:

  1. Market health score. This score is an average of Zillow’s 2014 Market Health Score for each city, along with U.S. Census Bureau figures for changes in vacancy rate. Zillow’s Market Health Index uses a combination of 10 variables, including housing value recovery and median days on the market, to measure a city’s housing health relative to others in the state. The quicker a house sells, the higher the score — a 10 is the highest. This is 30% of our score.
  2. Affordability. Using data from Zillow, we negatively indexed a house’s cost per square foot in each city to find how much buyers could get for their dollar. The higher the score, the lower the cost per square foot. To avoid seasonal fluctuations, we averaged data from the 24 months of 2013 and 2014. This is 20% of our score.
  3. Growth score. Using data from Zillow and the 2013 American Community Survey, we averaged the percent of houses that increased in value over the past 10 years, along with the growth in population since 2010. This is 40% of our score.
  4. Tax rate. Using data from the Washington Department of Revenue, we calculated the combined city and county property tax rate for each place. All tax rates are per $1,000 of assessed housing valuation. This is 10% of our score.

The Cable Bridge connects Pasco and Kennewick, Washington. Image via iStock.