Over the past few years, the Seattle real estate market has favored sellers over buyers due to tight inventory and soaring demand. But change is in the wind. Recent reports have shown that there’s more inventory coming onto the market, and that home prices are rising more slowly than in the past.
These developments have a lot of people asking the same question: Will Seattle become a buyer’s market in 2019? The short answer is “probably not.” But it seems to be shifting in that direction.
Will Seattle Be a Buyer’s Market in 2019?
Several recent housing reports have shown that inventory is rising within the Seattle real estate market. That’s a positive development for buyers planning to make a purchase in 2019.
Over the past few years, the city and surrounding metro area have suffered from a severe shortage of homes for sale. And this came at a time when the metro-area population was growing.
But that’s all starting to change. Earlier this month, KOMO News cited an industry report that showed “the number of homes on the market in Seattle has shot up by 54 percent since the same time last year. That increase is the second-highest in the nation, exceeded only by San Jose, Calif.”
It’s noteworthy that this quote mentions San Jose, California. Seattle and San Jose were two of the most constrained housing markets in the country during 2017. Now, both of them are seeing a rise in available inventory. They also both happen to be tech-industry hubs. So there are some interesting parallels here.
We’ve covered these inventory changes in previous blog posts. Back in August, for example, we wrote about a significant increase in the number of homes and condos for sale in the Seattle area. And then in September, we shared a report that revealed a surge in condo development in both Seattle and neighboring Bellevue, Washington.
All of these trends are affecting the buyer-to-seller dynamic in the area. It’s much too early to call Seattle a buyer’s market. That could still be a ways off. But the local housing scene does seem to be shifting toward “neutral” territory. This is a change from the past few years, when it was a strong seller’s market.
Economists Point to 2020 for a National Housing Shift
In related news, a recent survey sponsored by Zillow and conducted by Pulsenomics LLC “asked more than 100 real estate economists and experts for their predictions about the U.S. housing market, including when they expect the market to favor homebuyers over sellers.”
Three out of four survey respondents said they felt that the national real estate market would not shift to a buyer’s market until 2020 or later.
That’s for the nation as a whole, and we know that real estate conditions can vary widely from one city and region to the next. So it’s possible that some markets might begin to favor buyers as early as next year. But Seattle probably won’t be one of them.
Inventory has improved, and buyers today have more choices when it comes to purchasing a property in the Seattle area. Overall, however, the supply-and-demand picture still has sellers in the driver’s seat.
Two of the biggest changes that could affect the Seattle real estate market in 2019 are:
- More inventory. We’ve touched on this already. Home buyers entering the Seattle-area real estate market in 2019 should benefit from a higher level of supply, compared to years past. That should ease the level of competition, and maybe even put an end to “bidding wars” in some neighborhoods.
- Slower price growth. For a while there, home prices in Seattle were rising by double digits annually. But that pace has slowed considerably over the past year or so. There was even a short-term drop in prices reported recently. This is something that will likely carry over into 2019. Next year, house values in the area are expected to rise more slowly than they did in 2016 and 2017.
Conclusion: Given current conditions within the local real estate market, we probably shouldn’t expect to see a buyer’s market in Seattle for a while longer. But there does appear to be a shift occurring, one that could benefit home buyers in 2019.