Market Pulse — July 8, 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 nearby counties, including Whidbey Island. Here’s what stood out this week.

Seattle-Area Families Are Rethinking Where “Home” Really Is

Washington’s tax landscape has been a hot topic this year, and it’s prompting more high-net-worth families to reconsider where they want their primary residence to be — not just where they keep a weekend place. Washington’s capital gains tax posted record FY2026 revenue of $1.5 billion, nearly tripling the prior year, even as departures from the state continue to draw attention in tech and policy circles. We’re hearing from more prospective clients exploring a rural Snohomish County or island property as a full-time home rather than a secondary retreat. That changes the design brief: a full-time home needs a different level of year-round comfort, storage, and systems resilience than a place you visit six weekends a year.

Eastside Inventory Is Loosening Up

The Bellevue/Eastside luxury market has shifted from strongly seller-favorable to more neutral conditions this year. Mercer Island now sits at roughly 4.7 months of supply, after Q1 2026 inventory grew more than 40% across King County. Medina remains the exception — only 39 homes changed hands there in each of the last two years, underscoring just how scarce that address is. For buyers who can’t find the right existing home on the Eastside, building new on the right piece of land in Snohomish County and nearby counties, including Whidbey Island, is increasingly the more realistic path to getting exactly what you want.

Build Costs: Lumber Relief Is Coming, But Not Yet

There’s good news on the horizon for framing costs. U.S. trade officials have issued a preliminary determination cutting the combined duty rate on Canadian softwood lumber from about 35% to roughly 25%, though a separate 10% tariff layered on last fall means the real relief probably won’t show up until a final ruling expected in late August. Spot lumber prices eased to around $618 per thousand board feet in the first week of July after hitting an eight-month high in June. We build our estimates around today’s costs, not hoped-for relief, so there are no surprises later.

New Septic Rule Coming to Snohomish County

Starting November 1, 2026, Snohomish County will require a current septic inspection, as-built drawing, and service history before any home sale can close. If you’re building on a rural or shoreline lot with a septic system — which describes most of our island and county projects — this is worth planning for from day one. We build every septic and well system with full documentation as a matter of course, so our clients are already ahead of this requirement.

The Custom-Home Wish List for 2026: Wellness Over Show

The biggest shift we’re seeing in what clients want isn’t a specific feature — it’s a mindset. Homeowners are asking for saunas, cold-plunge rooms, and spa-style bathrooms designed to support real rest and recovery, not just impress visitors, a trend Houzz’s 2026 trend survey and other industry reporting both point to. Materials are warming up too: rich walnut and smoked oak are replacing the pale, cool tones that dominated the last few years. It’s luxury that doesn’t announce itself.

Design Partners, and Where Site Tech Is Headed

For full custom homes, we work hand-in-hand with independent architects who specialize in high-end residential design — if you don’t already have one, we’re glad to help you find the right fit. That partnership is formalized early through our Feasibility and Construction Agreement (FCA), the core document that governs both the planning phase and, if you move forward, the full build. Your architect reviews it right alongside you before anyone signs, so all three of us are aligned on roles and decisions from day one. In-house, we use Chief Architect for lighter design work like additions and remodels. On the technology side, a new wave of AI tools like Acres.com’s land-feasibility agent can instantly evaluate a parcel for zoning, terrain, and building constraints — a good signal of where site analysis for rural and island parcels is heading industry-wide, and something we watch closely when we’re helping clients size up a piece of land.

What This Means for Prospective Clients

If you’ve been thinking about a custom home in Snohomish County and nearby counties, including Whidbey Island — whether as a primary residence or a retreat — the current environment has a few things worth knowing: build costs remain elevated, the design-build calendar fills up, and the best subcontractors are booking ahead. The best time to start the conversation is before you’re ready to break ground, not after.

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.