We all know that home prices in Seattle have risen significantly over the last few years. Many who live and work in the Seattle metro area have become desensitized to those kinds of headlines. So here’s a fresh statistic that might grab your attention.
According to an August 2018 report from the real estate information company Zillow, home values in Seattle, Washington rose by 37.8% from 2010 to 2017. That was largely the result of an imbalance between supply and demand, which is still lingering today.
Home Values in Seattle Climb Nearly 40% in Seven Years
The company analyzed housing trends and price changes in some of the nation’s largest metropolitan areas. Specifically, they wanted to know if there was a correlation between home price gains and land-use regulations.
To quote the report:
“As the economy has recovered, both the job market and home values have seen strong growth. But in places where residential land use has the strictest regulations, and which often struggle to accommodate new housing, strong job growth is associated with a much larger increase in home values.”
To create the report, Zillow’s research team relied on findings from the Wharton Residential Land Use Regulation Index. They also looked at data pertaining to housing stock and home prices, for all of the metro areas studied.
Seattle is a good example of this correlation. The city was labeled as having the “most restrictive” land-use regulations, which means that it might be harder (relatively speaking) for residential builders to get projects green-lighted. The report also looked at job market growth and housing stock growth from 2010 to 2017.
Here were the numbers for Seattle, from 2010 to 2017:
- Employment change / job growth: 19.8%
- Home value change: 37.8%
- Housing stock change: 8.6%
Job Market Growth Brings More Home Buyers
Two things jump out from the numbers above: (1) rapid price growth, and (2) housing demand that has outgrown supply.
1. Rapid price growth
The first point is the rapid rise of Seattle home prices during that seven-year period. Most of that growth actually occurred within a four-year period, between 2013 and 2017. That’s a lot of home-price appreciation for such a short time period.
2. Demand outpacing supply
The other thing that stands out is the disproportionate growth in Seattle’s job market (labeled as “employment change” in the report) and its housing stock. This has contributed to the lopsided supply-and-demand situation we are still seeing today, in 2018. There are plenty of home buyers in the Seattle real estate market, but not enough properties available to meet that demand. This puts upward pressure on prices.
Home values in Seattle probably aren’t done rising yet. But they have slowed a bit. According to a recent report from the Northwest Multiple Listing Service, housing inventory has increased in Seattle and across King County, Washington.
For the first time in years, the local real estate market appears to be moving in a positive direction for home buyers. While inventory is still well below the national average, it continues to rise. And there has been a slowdown in terms of year-over-year price growth.
But make no mistake: It’s still a seller’s market in Seattle. The number of buyers who are actively seeking a home to purchase continues to exceed the number of properties that are available. But it’s a bit less of a seller’s market than it was a couple of years ago.