The Tacoma real estate market has changed dramatically over the last few years. So we thought it would be helpful to publish a real estate market update for those who are planning to buy a home in Tacoma, Washington in 2018.
Tacoma Housing Market Overview for 2018
As we start 2018, home prices in Tacoma are higher than they have ever been before. This is partly due to the “Seattle effect” that has boosted house vales all across the metro area.
According to the real estate information company Zillow, the median home value for Tacoma, Washington rose to $264,300 as of December 2017. That’s an increase of nearly 11% over the previous 12 months. To put that percentage into perspective, home prices in the U.S. tend to rise somewhere between 3% and 5% annually, going back several decades. So the recent gains in Tacoma far exceed historical averages.
Economists and analysts predict that we will see smaller gains during 2018, though the city could still outpace the national average for price growth. One recent forecast suggested that home prices in Tacoma would rise by around 5% over the next 12 months.
The inventory situation is another important factor for anyone planning to buy a home in Tacoma in 2018. We are starting the year with very low inventory levels within the housing market.
According to housing experts, a balanced real estate market has somewhere around five to six months worth of supply. In November, Tacoma was reported to have a meager 1-month supply of homes for sale. So it’s clearly still a seller’s market, in terms of the inventory situation.
There are still plenty of buyers in the market, but not enough properties listed for sale to satisfy the demand. Home buyers who are planning to buy a house in Tacoma in 2018 should understand this supply-and-demand dynamic. It affects everything from your offer price to your negotiating abilities.
Cost Comparison: Buying a Home in Tacoma vs. Seattle
Home prices across the Seattle metro area have risen sharply over the last couple of years. But they are highest within the city itself.
According to the latest data, the median home value in Seattle recently climbed above $700,000. But prices tend to drop off when you move into the surrounding areas, and that goes for Tacoma as well.
As mentioned above, the median home value in Tacoma was below $300,000 at the start of 2018. That’s a significant difference from the median for Seattle. This is good news for those who are planning to buy a house in Tacoma, Washington during 2018. Housing is more affordable there.
Higher Loan Limits for 2018
As we’ve explained in previous blog posts, the official loan limits for Tacoma and the broader Seattle metro area have been increased for 2018. This change applies to FHA, conventional and VA home loans.
At the end of 2017, federal housing officials announced that they would increase loan limits for all of these programs due to significant home-price gains that occurred during the year. Most counties across the nation will see higher limits this year.
In Tacoma, the 2018 loan limit for a single-family property went up to $667,000. This applies to FHA, VA and conventional mortgage products.
This is good news for anyone planning to buy a home in Tacoma in 2018. These changes will give buyers a higher financing range without having to cross over into jumbo loan territory. (Borrowers with sufficient income and good credit can still borrow more than these limits, with a jumbo mortgage.)