Seattle has clocked in for another month of record house price growth — and that’s not good news for everyone.

Home prices in the Seattle area rose 25.5% year-on-year in July, the third fastest rise in the country behind Phoenix and San Diego and Seattle’s highest-ever jump in 12 months, according to the latest S&P CoreLogic Case-Shiller Home Price Index, released Tuesday.

The index reports a three-month moving average of house prices and lags two months behind. The extent of the Seattle area includes parts of King, Snohomish, and Pierce counties.

According to Case-Shiller, prices rose nationally in July by nearly 20% year-on-year.

July 2020 was still early in the pandemic, but prices in the Seattle area were already rising as would-be sellers held onto their homes and buyers tried to take advantage of low interest rates.

CoreLogic deputy chief economist Selma Hepp said the surge in the number of investor buyers, millennial home shoppers and “relocation buyers” with larger budgets have fueled price increases in the past year. Slim offer didn’t help.


But rapid price increases can also push many potential buyers out of the market.

If a typical Seattle area buyer puts aside 10% of his income each month, he would have to save money for about 12 years to save 20% on an average home, based on current prices, according to Tomo, a real estate agent. to start. That’s more than 7 1/2 years in 1990. (Buyers can sometimes get a home with less than 20% amortization, but in competitive markets, higher down payments give buyers an edge.)

The price growth reflected in the Case-Shiller index came even as the Seattle housing market entered a typical summer slowdown in July. More homes were up for sale and some buyers took a break from their search. In August, the average single-family home in King County cost $850,000, according to separate data from the Northwest Multiple Listing Service.

Local prices are growing fastest in areas of Snohomish County, such as Snohomish, Mountlake Terrace and Lake Stevens, where prices rose more than 30% year-on-year in August, according to separate data from Zillow. In King County, prices rose about 19% in Burien, 18% in SeaTac and 14% in Seattle, according to Zillow.

“But there are signs that this growth is nearing a peak,” said Zillow analyst Nicole Bachaud. “Three-quarters of all cities in the Seattle area experienced a slowdown in month-over-month valuation from July to August, indicating a slight shift in the market is imminent, with home price gains settling in. to more ‘normal’ levels.”

Nationally, home prices rose in July for the 14th straight month and fourth month of record growth, said Craig Lazzara, managing director at S&P.

It’s too early to say whether price increases are caused by buyers looking to the suburbs or an acceleration in home purchases that would have happened in the coming years anyway, Lazzara said.

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