Market Pulse — July 17, 2026

Every couple of weeks, we share what we’re seeing across the Puget Sound custom-home market — the trends, costs, and shifts that actually affect a build in Snohomish County and across the greater Puget Sound. Here’s what stood out this week.

The Tax Debate Isn’t Settled — And Families Are Planning Around It

Washington’s new income tax on earnings over $1 million took a step closer to a public vote this month: a repeal effort needs roughly 340,000 signatures by early July to qualify for the November ballot, and as of July 9 the tax remains in effect. Meanwhile, the state’s capital gains tax pulled in $1.5 billion in June collections alone — about double what was forecast. Whatever the ballot outcome, we’re seeing more families treat where they hold a primary residence versus a private retreat as a real planning decision, not an afterthought. That’s changing what people ask for when they build: more permanence, more year-round livability, less “weekend house.”

A $28 Million Reminder That Puget Sound Luxury Isn’t Slowing Down

A waterfront estate on Mercer Island just sold off-market for $28 million — nearly double its assessed value — to an out-of-state buyer, one of the largest residential sales in the region this year. It’s a good reminder that serious capital keeps finding its way to Seattle-area real estate even in a cautious broader market, and that buyers with real resources often move off-market and on their own timeline rather than waiting on a typical listing process.

A New Energy Code Is Coming This Fall — Budget For It Now

Washington regulators opened public comment this month on the 2026 update to the state’s residential energy code, covering everything from window performance to mechanical duct placement, with hearings in early August and adoption targeted for September 25. If you’re planning to break ground next year, it’s worth pricing your project under today’s code before the new requirements lock in.

Lumber Costs Ease a Little Further

Framing lumber slipped to just over $625 per thousand board feet this week, and federal regulators are still expected to lower tariffs on Canadian softwood lumber later this year as part of an ongoing review. It’s a modest bit of good news on the cost side, continuing the gradual easing we’ve been tracking the last few weeks.

Where Design Software Is Headed

For full custom homes, we work hand-in-hand with independent architects who specialize in custom residential design. In-house, we use Chief Architect for lighter design work like additions and remodels, and we keep a close eye on where the broader industry is headed. Autodesk recently previewed “neural CAD” — AI tools aimed at automating large portions of the design process inside platforms like Revit and Forma. We don’t think AI will replace the judgment that goes into a truly custom home, but it’s a clear signal of how fast design tools are evolving, and we’re watching closely to make sure our own process stays ahead of the curve.

What This Means for Prospective Clients

If you’ve been thinking about a custom home in Snohomish County or elsewhere across the greater Puget Sound — whether as a primary residence or a private retreat — a few things are worth knowing right now: the tax and residency conversation is genuinely still unresolved, luxury sales in the region show no sign of slowing, and building costs remain a moving target that we plan around rather than guess at.

We’re a small firm by design. We work with a limited number of clients each year, and we take the time to get the project right. If you’re curious about what custom design-build actually looks like — the process, the timeline, the decisions — we’re happy to talk.

Reach out here.