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Summary: What are the housing markets like across Washington state right now? Will there be any buyer’s markets coming up? This article will explain.
Some real estate markets across the state of Washington have seen some cooling, with price increases slowing down in some areas, including Seattle. But right now, Washington’s housing market is pretty hot, so it’s not quite a buyer’s market just yet. The question is, will it be any time soon?
The truth is, we probably won’t see a true buyer’s market in Washington for quite some time. This is largely due to housing supply shortages, combined with steady demand from buyers.
Buyer’s Market in Washington? Not for a While
According to real estate research firm Zillow, the housing market in Washington is very hot right now. The average home price is currently about $428,900 as of August 2020, which is 6.6% higher than what it was the same time last year.
Even though the current health crisis has thrown a wrench in the housing market across Washington and the rest of the country, it has actually picked up quite a bit since the pandemic started. Now, all that pent-up buyer demand is being unleashed, and many buyers who waited throughout the pandemic to get into the market are finally making a move. We can see this with the surge in mortgage applications over recent weeks.
Further, inventory is still very low. The supply of housing is simply not enough to keep up with demand. And when demand is stronger than supply, that creates some competition among buyers.
Definition: In a real estate context, a buyer’s market happens when there are (A) plenty of homes available for sale, but (B) not enough qualified and motivated buyers to “absorb” them all. In other words, it occurs when housing supply is high but demand is comparatively low.
A seller’s market is basically the opposite. That’s when there are plenty of buyers in the market but not enough homes listed for sale to meet the demand. Sound familiar? Generally speaking, house values tend to rise faster under these conditions.
Aaron Terrazas, senior economist for Zillow, recently wrote: “The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly.” He cited the increase in real estate price cuts, mentioned earlier, as one sign of this shift.
But Washington State is a special case when it comes to real estate. Strong demand and low supply made Washington one of the hottest housing markets in the country. In terms of year-over-year price gains, it has outperformed many other states over the last couple of years.
More Inventory, Slower Price Growth
Home prices are rising more slowly now than in previous years, across the state. And there does seem to be more inventory coming onto the market. But despite these changes, there still isn’t as much inventory to fill the buyer demand. As such, we probably won’t see a real buyer’s market in Washington for some time yet.
For the rest of 2020, real estate markets across Washington State will likely continue to favor sellers over buyers. It will take time for the inventory situation to change enough to tip those scales.
Major housing markets across the state are still experiencing tight inventory conditions. Most people know about the supply shortage in the Seattle area, since it has generated so many headlines over the last couple of years. But similar conditions are being reported in other cities as well.
That’s why Washington has been a seller’s market for the last few years. There have been plenty of buyers and investors actively seeking homes to buy, but not enough properties to go around. These conditions could change over time, given the cyclical nature of the real estate market. But we probably shouldn’t expect to see a buyer’s market in Washington anytime soon.
Have Questions About Mortgages in Washington?
Are you ready to apply for a mortgage, or simply have some questions about home loans? Then get in touch with Sammamish Mortgage for help. We are a local, family-owned company based in Bellevue, Washington. We offer several mortgage programs to borrowers across the entire state, as well as Oregon, Idaho, and Colorado. Please contact us if you have mortgage-related questions.