The Seattle housing market may not be the hottest in the country since it underwent a bit of cooling off this year, but it is still a pretty hot market. Home prices continued to rise, although at a less frenzied state. Median rent prices, meanwhile, showed a shallow dip over the course of 2018 but not that much.
Median home prices in 2018 based on Zillow’s data averaged at $739,600 and is forecasted to rise by 1.1% to $792,000 in 2019. As for the median monthly rental prices, it averaged at $2,554 so far this 2018, which is actually 2% less compared to 2017 rent prices.
|2018 Rates||2019 Predictions|
|Home Prices||Up 4.5%||Up 1.1%|
|Median Monthly Rent Prices||Averaged at $2,554
(Down 2% from 2017)
|Most likely to continue on this level|
More concrete prediction data of what the median rental prices will look like in 2019 are not yet out. However, this dip is expected to continue on through 2019 and might rise again for a small percentage.
Seattle Home Appreciation Rates and Real Estate Market Health
According to NeighborhoodScout, the average annual home appreciation in the area is 4.30%. This effectively makes Seattle part of the top 10% locations in the country with soaring home appreciation rates.
The top 5 highest appreciating neighborhoods are Boren Ave./Madison St., 12th Ave. S/S King St., Mars Hill Graduate School/Elliott Ave., Cornish College of the Arts/Stewart St., and James St./Boren Ave.
|Type of Listing||# for Sale||% of Listings|
|Condo / Townhome||
|Mobile / Manufactured||
Most of the homes for sale in Seattle’s real estate market are single-family homes, which make up 63.63% of the inventory. A close second, at 26.74% of the inventory, is condos and townhomes. There are multi-family and mobile homes for sale as well, but they only make up around 3% of the properties available on the market. The remainder of the 7.12% listings are not technically homes, instead they represent land for sale.
As a whole, Zillow.com considers the Seattle market less healthy with a score of 4.2 out of 10. There were 3.9% of homes with negative equity as of June 2018. However, based on the housing forecast released by Matthew Gardner (Windermere Chief Economist), this does not mean that Seattle’s on a housing bubble.
This is just the market correcting itself and finding a more stable balance after all of the frenzy that followed the housing crash. Gardner further elaborates that there is nothing to be afraid of in the numbers.
He doesn’t see the key factors that led to the crash, such as lack of demand, unqualified home buyers, and overbuilding. At the moment, most buyers are even overqualified and paying above-minimum down payments. Zillow’s data corroborate this as they showed only a measly 0.2% are being delinquent on their mortgage as of mid-2018.
More Property Choices for Seattle Home Buyers in 2019
The continuous increase in housing prices in Seattle is nothing new because it has been increasing steadily for the past decade. The price hike was even faster in the most recent years due to the demand outpacing the supply. But forecasts show that 2019 will be different. As mentioned above, the price increase will happen at a slower rate.
This is mainly due to the increase of the home-for-sale inventory in the region. The Northwest Multiple Listing Service (MLS) published a report in October 2018 that stated, “there will double-digit increases in inventory”. MLS has property listings in 23 counties; they basically cover the whole of Seattle metro.
What this means then for homebuyers is that there will be more property choices available in the market moving forward. Since the supply will now more or less meet the expected demand, the rise of housing median prices won’t be as pronounced.
In fact, MLS reported that “In King County, supply exceeded two months for the first time since January 2015”. If you are looking to settle in Seattle, it couldn’t hurt to start your search for a new home in King County. Consider investing in pre-construction condos as well. See some tips here on how to do that.
Buy Sooner Than Later But Be Aware of Market Stress Points
Now that home price increases are slowing down, it is a great time to invest in a Seattle home. But just like in previous years, expect for properties to get snatched up pretty quickly and be ready for bidding wars as they happen often. So, you would still need to exercise quick decision-making skills in dealing with this particular housing market.
That does not mean, however, that you do not employ caution. Local policies might be implemented that will drastically upset the market’s current steady pace. For example, Seattle’s real estate industry experienced quite a scare in May 2018.
The Seattle City Council said yes for a head tax to be implemented in companies, which amounted to $275 per employee. Businesses with more than $20million revenues were affected. The idea was to raise money (about $47million every year) in order to help curb homelessness in the metro.
Amazon, who has established a large operation in the city, did not take this kindly. They threatened to stop all of their developments in the area, particularly their employment of locals. This could have led to people tightening their belts as job security was put into question. As a result, the Seattle City Council repealed the head tax less than a month after their initial decision.
As you hunt for your new home in the city, be aware of things like these that can heavily affect the real estate market. Keep an ear open for news of policies and other regulations that might make the situation more difficult or those that will open doors of opportunities for you. Bear in mind as well that the fast-paced Seattle market can cause stress to both sellers and buyers.
Buyers often find themselves running after constantly increasing home price changes. Sellers, meanwhile, have to compete with so many other sellers that the ability to receive a fair price for their property might become an issue. There is a lot of pressure points, so tread carefully but move with purpose.
A Bright Outlook for the Future of 2019
All in all, the outlook for the Seattle real estate market is that it is still tight but it is improving and the forecast is sunny. It will continue to be highly competitive moving forward but there will be more property options for you.
The following is an archived article originally published February 1 2018 about the 2018 real estate trends. Archived Article: “Seattle Housing Market in 2018: Still Warm but not Red Hot”
Seattle Housing Market Forecast 2018?
Seattle’s housing market has been red hot for years, with home prices and rents soaring in recent years. While that will slow somewhat in 2018, the market shows few signs of actually cooling off.
According to Zillow, housing prices are going to continue to rise in 2018, though not as steeply as they have risen in recent years. In 2017, Seattle home prices hit a record high of $700,000 within the city limits in April and the median rent in the same area hit $2,000 per month.
For 2018, Zillow predicts home prices and rents will continue to rise, just more slowly. Where in 2017 home values grew by 12.7 percent, more than twice the national average of 6.21 percent, in 2018 Zillow expects home values to go up a comparatively slower 5.4 percent.
When it comes to rents in the city, prices increased by 5.4 percent in 2017, but should cool off to around 3.5 percent in 2018.
All of this means a still very hot housing market in Seattle, but not nearly as blisteringly hot as last year. It could be a sign that the housing market in Seattle is reaching a peak,
|2017 Rates||2018 Predictions|
|Home Prices||Up 12.7 percent||Up 5.4 percent|
|Rent Prices||Up 5.4 percent||Up 3.5 percent|
Seattle’s housing market won’t be especially unusual in 2018 compared to other major metropolitan areas. Most major markets are experiencing higher home prices and steady increases. However, the West Coast has been particularly hot and will continue to be the center of the action.
Two of the hottest markets for 2018 are predicted to be Seattle and Las Vegas. These two cities in particular are continuing to experience extremely hot housing markets and will see little cooling off in 2018. San Francisco, which has experienced tremendous spikes in housing prices, should also see continued increases in 2018.
Throughout the entire country, housing prices have risen 6.2 percent, far outpacing the rate of inflation. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index found that Seattle, Las Vegas and San Francisco had the largest year over year gains in housing prices among the top 20 cities in the country. And the Index further predicts that home prices will continue to rise faster than inflation, particularly in places like Seattle.
Why are Seattle Apartment Rents Rising Slower and What Does it Mean for Housing?
One outstanding quirk in all this data is that rents in Seattle are actually dropping very slightly. In December 2017, rents in King and Snohomish counties dropped by 2.9 percent, according to The Seattle Times. That hasn’t translated to a huge drop in prices for renters, who have seen an average savings of only about $50 a month. And rent still increased by 4.5 percent throughout the region compared to a year ago. That is the slowest increase in recent years, but still matches the continuing rise in housing prices generally.
Part of the reason for this slight dip has been the number of empty apartments around the region. As the housing market boomed in Seattle, housing prices spiked and construction flourished. But now many of those newly built apartments are sitting vacant, some in the most popular neighborhoods in the city. This has meant more negotiating power for renters, as landlords can’t necessarily count on immediately filling empty units any longer. With more options and more leverage, some renters have found opportunities to bring down their rental costs.
So what does this mean for home purchase pricing? Likely a similar slow down. The two markets are cooling off together and the trend in rents may be a sign of what’s to come for homes. While both rental prices and housing prices continue to rise, the signs point to a slowdown in that rise and perhaps an impending cool down.
How to Capitalize on the Forecast
With all this news and data about the housing market cooling off somewhat, what’s the right plan for people looking to buy?
Fortune recommends buying sooner rather than later. Prices are still continuing to rise and don’t look like they’re going to stop anytime soon. In order to get into the market at the right time, a time when it’ll be possible to make the best investment possible, buyers will need to pull the trigger pretty soon. All the signs point to the West Coast and Seattle continuing to be the place to buy.
Of course, this is easier said than done. Especially in markets like Seattle, buying a home can be quite an adventure. Houses get snatched up quickly and bidding wars are common. CNN called Seattle one of the hardest places to try to buy a house in May 2017. Not only are home prices rising, but a flood of new residents are moving to Seattle, making competition extremely high.
If you are planning to try to buy in the current Seattle market, go in prepared to make quick decisions. Don’t get discouraged by getting out-bid. Buying a home in Seattle is bound to be a long process. Buyers should give themselves as many options as possible and go in to a negotiation with all their paperwork prepared.
Will the Trend Continue in Seattle?
Every indication points toward the trend in housing prices in Seattle continuing. This means a slight cool-down but overall very hot market. Corresponding trends in population and incomes support the idea that Seattle will continue to have high housing prices and lots of competition.
So the short answer is: Yes, the trend in housing is definitely going to continue. However, there’s a rather large caveat in that housing prices shouldn’t rise nearly as precipitously as in recent years. This opens the door a crack for home buying, but buyers will need to act quickly to get the best deals and return on their investment.