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Summary: 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. In this article, we’ll discuss where the Washington State housing market is expected to go in 2020.
Previously, we explained how some housing analysts and economists are making bold predictions for the Washington State real estate market through 2020. 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.
Update on Housing Market Inventory in Washington
According to the most recent housing market reports, all of the major cities in Washington had less than a 2-month supply of homes in January 2020. The nation as a whole had about a 3.7-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 1.58-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.
Home Prices Keep on Rising in 2020
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 $409,000 last month. That was a gain of around 3.6% from the same time last year. Looking forward, their economists are projecting another 3.3% growth over the next year.
Population Growth Brings Buyers Into the Market
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.
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 appromiately 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 2020? Basically, more of the same.
Home prices in Washington State are projected to continue along an upward path in 2020, following roughly the same pace as price growth in 2019. 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. We are pleased to offer a myriad of mortgage programs to our valued clients. If you have any mortgage-related questions, don’t hesitate to contact us today.