SEATTLE IS THE HOTTEST REAL ESTATE MARKET FOR THE 20TH MONTH IN A ROW
Seattle leads the nation in home price increase for 20 months in a row! This ties for the SECOND longest streak ever recorded.
The latest Case Schiller Index report shows that Seattle home prices have led the NATION for 20 months straight!!
Is this sustainable? What's my opinion about what's happening now and what's going to happen moving forward.
The current streak ties San Fransisco's streak that happened in 1999 during the "dot com" boom. It's just behind the record breaking streak from Portland, that was a whopping 23 months in 1992.
Seattle has had the hottest housing market since September of 2016. Home prices have increased ~$200,000, which is 8x the national average! Just in April, our home prices increased more than 13% YOY.
- Median Sales Price in Seattle September 2016: $625,000
- Median Sales Price Eastside September 2016: $768,000
- Median Sales Price Seattle NOW: $830,000
- Median Sales Price Eastside NOW: $960,000
Well, right now, more inventory has come. We're coming up in July and inventory has risen quite a bit since last month. We've increased more than 25% since last month, which is causing less multiple offer situations and more homes sitting for longer.
But, this is seasonal. Statistics say this is just a season. It happened last year during our streak and we're experiencing it now.
Going forward, I think home prices are going to pick back up, but probably not in the 13%'s that we've been seeing. Everything lines up for Seattle to be successful: essentially a "recession proof" economy, Amazon growing, Facebook growing, Google growing, Microsoft growing and many others.
In addition, we have a HUGE lack of affordable housing and houses in affordable price points (condos for example). Of the 24,000 housing units that are set to deliver this decade, over 90% of them are FOR RENT. The inventory that will be available (new construction wise) is essentially already reserved.
What I think could slow it down a little bit is the rising interest rates. We've already seen quite a big jump from the beginning of the year and it's projected to continue to grow. A 1% increase of interest rates can affect a buyers purchasing power SIGNIFICANTLY. We started in the 4%'s and now we're creeping up to the 5%'s.
All in all, Seattle is very attractive -- for job growth, companies locating up here (our vacancy rate is extremely low and we have companies re locating up here constantly), and investors.
What do you think?