Seattle has held the title of the nation’s hottest housing market for 18 months and counting, as continued population growth powered by the region’s tech boom and few available homes keep prices soaring.
According to the latest update from the Case-Shiller national home price report, Seattle home prices in February rose 12.7 percent over the same period a year ago. The report calls out Las Vegas and San Francisco as the second and third fastest-rising housing markets and the only other markets with double digit annual gains.
The report follows data released by the Northwest Multiple Listing Service earlier this month showing the median price for a home in Seattle jumped to $819,500 in March, gaining nearly $43,000 in value over last month’s record numbers. Should this pace continue, the median sale price could creep up close to $1 million toward the end of the year.
According to GeekWire contributor Tim Ellis’ Seattle Bubble, home prices are up close to 24 percent over the 2007 peak, prior to the recession. The Seattle Times reports that home prices have risen 85 percent since the local housing market bottomed out in 2012.
Nationwide, home prices rose 6.8 percent in the last year. Prices nationally are up for the past 70 months, dating back to May 2012.
“The kind of sustained, rapid home price growth we’ve been seeing in Case-Shiller and other indices for the past few years is enough to give home buyers of all stripes a headache,” Zillow Chief Economist Dr. Svenja Gudell said in response to the report. “But that pain is especially acute for first-time and lower-income buyers at the bottom end of the market in search of entry-level homes that are appreciating the fastest, in large part because they are in the most demand.”
NWMLS noted that many buyers in the Seattle area, frustrated with losing out on bidding wars for homes in prime locations, are turning to suburban locations but not finding any relief there. This trend has caused neighboring cities and counties to see even faster price increases than Seattle itself.
There are some signs of hope for buyers on the national level. A Zillow report released this morning found that new home inventory passed the threshold of 300,000 available units for the second month in a row, the first time that’s happened since the spring of 2009.
“More inventory is the one cure sure to take this edge off, and there are some faint signals in more recent data that a shift may be coming – inventory of existing homes has risen for the past three months, and construction activity is at its highest point in a decade,” Gudell said. “But buyers in the market now shouldn’t hold their breath. Even if inventory does begin to recover, it will be rising from incredibly low levels and will likely take years to get back to a more ‘normal’ level.”