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The housing market in the state of Washington is a hot one right now, with home prices on a steady rise, demand strong, and inventory short.
Previously, we explained how some housing analysts and economists are making bold predictions for the Washington State real estate market through 2021. Home prices in the area are expected to outpace the national average over the coming months.
This is particularly true within the Seattle metro area, and it’s largely the result of chronically low inventory within the housing market.
According to the most recent housing market reports, all of the major cities in Washington had less than a 1.3-month supply of homes in January 2021. The nation as a whole had about a 1.9-month supply of homes for sale in January. And both of these numbers fall short of what is considered a “balanced” or normal real estate market.
According to most economists, a healthy real estate market has between a 5- and 6-month supply of homes for sale. In theory, that means it would take 5 to 6 months to sell all of the homes currently listed for sale if no new ones came onto the market in the interim. It’s just a standardized way to measure inventory within a housing market. And Washington State is still falling short.
King County had the lowest inventory levels in January, with a 0.71-month supply. Above all else, this is why Washington State keeps generating positive housing market and home price forecasts. House values across the state are expected to continue rising as a result of the supply-and-demand imbalance.
With low inventory and strong demand within Washington’s housing markets, it’s no wonder we have seen steady home-price appreciation over the last years.
According to the latest figures from Zillow, the median home value for the state reached $458,313 last month. That was a gain of around 12.1% from the same time last year. Looking forward, their economists are projecting another 11.3% growth over the next year.
People are flocking to Washington State. And as more people continue to make their way here, the demand will remain strong and inventory will continue to struggle to keep up. In fact, recent data suggests that the state is experiencing a positive “net domestic migration,” which means that more people are moving into the area compared to those who are moving out.
Over the past decade, Seattle’s population grew 25%, adding another 152,000 residents.
In 2019, Seattle’s population grew by 2.3% from the previous year, and King County as a whole saw a population increase of 1.6% from the previous year. The Seattle Metro Area now has a population of approxmiately 4 million.
All of this means there are more residents who need to find housing. Some will become renters, while others will enter the housing market in search of a home. This supports the demand side of the supply-and-demand equation in the Seattle area and other Washington housing markets. And it comes at a time when inventory is at record lows.
So what’s the outlook for the rest of 2021? Basically, more of the same.
Home prices in Washington State are projected to continue along an upward path in 2021, following roughly the same pace as price growth in 2020. Every forecast we have encountered agrees on this, and that’s largely due to the low housing market inventory across Washington State.
Disclaimer: This article includes various trends, projections, and forecasts relating to the Washington housing market. This information was compiled from third-party sources not associated with our company. We have gathered it here as an educational service to our readers.
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region including Colorado, Idaho, and Oregon. We are pleased to offer a myriad of mortgage programs to our valued clients that we have been offering since 1992. If you have any mortgage-related questions, don’t hesitate to contact us today.
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