A new housing-industry report published on Halloween brought not spooky but spectacular news to Seattle-area home buyers their real estate agents.
According to that report, the Seattle metropolitan-area housing market is one of the top larger markets in the country right now for inventory growth. The number of active listings climbed by a whopping 60% in October of 2018, when compared to the same month a year earlier.
Seattle #2 for Housing Inventory Growth
On October 31, 2018, the economic research team at Realtor.com® put out a report that showed where housing inventory has grown the most over the last year.
Specifically, they looked at the 45 largest metropolitan-area housing markets in the United States to determine where active real estate listings have increased the most. Seattle was ranked at #2, with the second-biggest increase in inventory year-over-year.
To quote the report:
“In October, 26 of the 45 largest markets in the U.S. saw year-over-year inventory increases, up from 22 markets last month. The five markets that saw the largest inventory jumps were San Jose, Calif.; Seattle; San Francisco; San Diego; and Nashville, Tenn.”
The number or active real estate listings in the Seattle-Tacoma-Bellevue metro area rose 60% from October 2017 to October 2018. Only the San Jose, California metropolitan area had a larger gain (130%).
Rounding out the top five metros for inventory growth were San Francisco, San Diego and Nashville.
An October report from the Northwest Multiple Listing Service also showed an uptick in the number of homes on the market. According to their data, housing inventory across King County grew by 78% from September 2017 to September 2018.
Shifting Conditions, But It’s Still Not a Buyer’s Market
These recent reports bring good news for the Seattle real estate market, and especially for home buyers who are planning to enter the market in late 2018 or in 2019. As a result of these trends, future buyers should have more properties to choose from compared to those who purchased last year. It’s like much-needed rain following a long drought.
Granted, the Seattle-area real estate market is still “constrained” by historical standards. So it still favors sellers over buyers, for the most part. But there is a significant shift happening right now, as we enter the last two months of 2018. It will be a major contributing factor to Seattle housing trends in 2019.
A Slowdown in Price Growth
Changing inventory conditions could also have a cooling effect on home-price appreciation across the metro area, and particularly within Seattle itself. We’re starting to see signs of this already. And with the affordability issues that have plagued the city in recent years, a slowdown might be a good thing.
A shortage of supply is one of the key reasons why home values in the area rose so much over the past three years or so. Housing demand far exceeded the available supply, and so prices shot up.
But now the real estate market is gaining some much-needed supply, with even more expected over the coming months. (See our related article about a wave of condos coming to Seattle and Bellevue soon.)
It’s stands to reason that steady growth in housing market inventory would have a cooling effect on home values, as we move into 2019. That much remains to be seen. But price growth during the first part of 2018 was definitely slower than it was during the two previous years.