Summary: The average home price of homes in Seattle skyrocketed from 2012 to mid-2018. For over a year after that, prices dipped, but have since climbed back up. So, what have home prices in Seattle done since? This article will explain.
Since the 2008 housing market crash, home prices in Seattle have climbed quite a bit. Prices went from a valley of $372,000 in April 2012 to a whopping $786,000 just six years later by May 2018.
Fewer home went “underwater” during that time and values went up, not just in Washington but nationwide as well. However, prices retreated somewhat from May 2018 to late 2019. But since November 2019, home prices in Seattle have made a comeback. As of June 2020, the average home price in Seattle is $767,900.
This is good news for homeowners who are seeing their equity increase again (or negative equity turning positive). Homeowners in the Seattle area have a real reason to rejoice: according to real estate research firm Zillow, Seattle homes increased 2.2% in value over the past 12 months.
Increased Home Values and Low Interest Rates
Together with mortgage rates that remain at historically low levels, this means that many homeowners who bought their homes with small down payments and mortgage insurance can now get rid of that expense because they may have enough equity that their lenders will allow its removal. Removing mortgage insurance can be as simple as borrowers getting an appraisal to satisfy their lender that the loan is less than 80% of their home’s current market value.
Higher appreciation could also make refinancing at a lower interest rate feasible, too. Any homeowner who was frustrated a year ago because they didn’t have quite enough equity to refinance to a lower rate mortgage may discover that this important money-saving strategy has become a reality. Depending on the size of the loan, even a ½% drop in the rate can save many thousands of dollars in interest.
This healthy rate of appreciation is not necessarily good news for everyone, however. Those who have been on the fence about becoming homeowners risk seeing home prices get beyond their reach. The home that is affordable today may be unaffordable in a year, when the same home could bring higher prices.
This is not to suggest that the outlook is gloomy for Seattle homebuyers. Don’t be fooled by the common narrative about the “normal” 20% down payment, or the impossibly strict lending guidelines. In the words of a certain gentleman from Delaware, that is all “malarkey!” The most important thing is being aware of the rise in home prices and then deciding when and how to act to offset upward-trending expenses.
Increased Equity as Home Values Appreciate
Purchasing a home in the Seattle market today means not only being protected from rising prices, but having a sound investment for the future as your largest and most important investment—your family’s home—continues to rise in value.
If you’re selling and buying a home in Seattle at the same time, you can take advantage of the equity that appreciation has built into your current home. To manage the move-up process, you’ll want to come equipped with the knowledge and techniques to have a successful experience. One way to improve your preparation is by downloading our free ebook by clicking here.
Need a Mortgage to Buy a New Home?
If you’re in need of a mortgage, Sammamish Mortgage is here to help. We are a mortgage company serving the Pacific Northwest region including Washington, Idaho, Colorado, and Oregon. We have been providing mortgage programs with flexible qualification criteria to borrowers since 1992. Please contact us if you have any questions or are ready to apply for a home loan.