Denver, Colorado continues to woo homebuyers as home prices rose by 10.20 percent as of June according to the Case-Shiller 20-City Home Price Index. The Mile-High City was the only city included in the index that posted double-digit year-over-year growth in June. San Francisco, California posted a 9.50 percent year-over-year gain in home prices and Dallas, Texas rounds out the top three cities posting highest year-over-year home price growth with a reading of 8.20 percent.
Seattle, Washington has been a seller’s real estate market for the last couple of years, and the scales will probably stay tilted in that direction during 2018. This is the result of strong demand from buyers and a limited inventory of homes for sale.
Seattle Still a Seller’s Market in 2018?
It should come as no surprise to anyone who lives in Seattle that the local real estate market currently favors sellers or buyers. This has been the number-one real estate news story of the last couple of years, generating a slew of headlines and media coverage.
Related: Tips for Seattle home buyers
But what about 2018? Will Seattle continue to be a seller’s market next year? Based on current conditions, the answer is a resounding yes.
Exhibit ‘A’ — The Supply Situation
Let’s start with the supply situation. According to housing experts and economists, a balanced real estate market has somewhere around five months worth of supply. When inventory levels drop far below this level, the market tends to favor sellers over buyers.
As of November 2017, Seattle had roughly a one-month supply of homes for sale. So the market is still very constrained, from an inventory perspective. This is true for many cities across the country. In fact, the national average was around three months worth of supply in November. And even that is below what’s considered to be a balanced market.
But few cities can rival Seattle in this department. The city currently has one of the lowest levels of housing supply of any city in the country. That’s one of the reasons why Seattle will remain a seller’s market in 2018. There just aren’t enough homes listed for sale to satisfy the current level of demand.
Exhibit ‘B’ — The Demand Situation
And speaking of demand, homes across the Seattle metro area are selling quickly and often above the original asking price.
Real estate analysts use the “median days on market” measurement to get a sense of how quickly homes are selling in a particular area. During the fall of 2017, homes for sale in the Seattle real estate market spent a median of around nine days on the market before going under contract. That was well below the national average for the same time period, and is yet another indicator that Seattle is still a seller’s market.
Demand for homes remains strong across the metro area, with a boost from tech workers.
According to John Deeley, chairman of the Northwest Multiple Listing Service:
“The Seattle [housing] market is inundated with technology workers, both newly relocated and those that have been renting and are ready to set down roots.”
Major Price Growth During 2017
All of these trends combined have put tremendous upward pressure on home prices in the Seattle real estate market. In fact, if you exclude condominiums and look at single-family detached homes only, the median home price in the area is now clearing $700,000.
That’s one of the reasons why Seattle got higher loan limits for 2018.
And while prices are expected to slow down a bit, they will almost certainly continue rising throughout 2018. According to the real estate information company Zillow, the median home value for Seattle rose by around 14% over the last 12 months (through November 2017). The company’s economists expect prices to rise by another 5.4% over the next 12 months.
Here’s the bottom line to all of this. Due to the high level of demand and severely low inventory, Seattle will likely remain a seller’s market through much or all of 2018.
Last year, we created a survival guide for home buyers who were planning to enter the Seattle real estate market. That guide is still very relevant to current market conditions, so it is well worth a read.