Last week's economic news included an encouraging report from the National Association of Home Builders, whose housing market index held steady with a reading of 60 in July. This was the 13th consecutive month for readings over 50, which indicate that more builders are confident about housing markets than those who are not. July's reading was noteworthy as it was the highest since November 2005 prior to the recession.
Summary: Over the past 12 months, Seattle and Bellevue real estate markets have been rather cool and are expected to stay that way into 2020. But Everett and Tacoma have seen a heated real estate market, and experts forecast the same to continue into the new year.
The latest housing market forecasts for Seattle, Bellevue, Everett, and Tacoma suggest that the first two markets will see smaller home price gains in 2020 as they did in 2019, while the latter two will continue to see healthy gains. While Seattle has traditionally been seeing double-digit gains over recent years leading up to extremely high real estate prices compared to other markets in Washington state and other parts of the country, its market will continue to be cool into 2020, according to experts.
Housing Forecasts for Bellevue, Everett, Seattle and Tacoma
A new round of real estate market forecasts point to an ongoing cooling trend for home prices in Seattle and Bellevue, according to the housing research team at Zillow. Having said that, the cooling trend will not be as pronounced. Over the past 12 months, home prices have actually declined by 3.9% and 2.9% in Seattle and Bellevue, respectively. But in 2020, they’re expected to rise slightly by 0.5% and 1.7%, respectively.
And that’s a good thing, considering that the Seattle metro-area housing market has been overheated over recent years.
In contrast, the real estate markets in Everett and Tacoma have been very hot over the past 12 months, with price gains of 2.5% and 7.7% in each city, respectively. And this trend is expected to continue into 2020, with increases of 2.0% and 5.1% in Everett and Tacoma, respectively. As you can see, the market in Tacoma, in particular, has been especially hot and is expected to have continued strong gains in the new year.
What does this mean for buyers? It means that now might be a great time to buy before more gains are seen in 2020. Buying before prices increase even further can help buyers save quite a bit.
Below, you’ll find the current median home value for each city, along with price changes that occurred over the last year. Zillow’s forecast for the next 12 months (through December 2020) is also included. Home price trends for the nation as a whole are shown for comparison purposes.
- Bellevue: $920,000 // -2.9% change // +1.7% forecast
- Everett: $432,000 // +2.5% change // +2.0% forecast
- Seattle: $729,000 // -3.9% change // +0.5% forecast
- Tacoma: $335,0000 // +7.7% change // +5.1% forecast
- U.S. average: $243,000 // +3.8% change // +2.2% forecast
As you can see, the real estate market in the nation as a whole is rather strong. Tacoma, in particular, is the only city that has grown faster, though gains are still expected to be made in 2020, no matter how large or small.
Related: Buying in Washington vs. Oregon
Seattle and Bellevue may not have seen as strong gains in 2019 that Tacoma and Everett have, but their prices are still among the highest in the nation. You might think that these higher price tags would deter buyers. But that’s not the case. Pending sales across the area are still rather strong, according to Northwest MLS. So clearly there is still strong demand from buyers across the Seattle metro area real estate market, though perhaps not as strong as in recent years.
Lack of Inventory Still a Driving Factor
Lack of inventory is one reason why Tacoma and Everett housing markets are forecast to keep up with or even outpace the nation in 2020. And even though Seattle and Bellevue’s markets may not be as strong as the previous two right now, they are expected to see slight gains, and strong demand from buyers, coupled with limited supply, are currently an issue and will continue to be going into 2020. They certainly have put upward pressure on home values across certain centers in the region. You can see this clearly when you look at the year-over-year price changes shown above.
According to the Northwest MLS, King County, Washington currently has less than a two-month supply of single-family homes and condos for sale. Industry analysts say that four to six months of supply is indicative of a balanced or “normal” real estate market. By this measurement, the housing markets in Bellevue, Everett, Seattle and Tacoma still favor sellers over buyers. And those conditions will likely persist as we move into 2020.
Disclaimer: This article includes housing market and home-price forecasts for the cities of Bellevue, Everett, Seattle and Tacoma, Washington. These projections were provided by third parties not associated with our company. We have presented them here as an educational service to our blog readers.
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