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Home prices in Seattle rose by around 12% over the past 5 years. That even includes the drop in home prices over the past year. Where will prices go in the next year?
Seattle has long been a hot housing market, with home prices more than double many other parts of the state of Washington and the country as a whole. Over the past two decades, prices have skyrocketed, making prices extremely high for home buyers but giving homeowners plenty of equity by riding this wave of appreciation.
We hear a lot about home-price changes from year to year. But what about the long term? Sometimes, it’s interesting to see how much home values rise during a 5-, 10-, or even 20-year period.
Among other things, this allows us to calculate the average appreciation rates without them being overly influenced by short-term spikes or dips. We can also compare one city to another, to determine where prices have risen the most over time.
We’re taking the long view by showing how home prices have changed in Seattle during a 5-year period. Specifically, the change in the median home value for each metro between 2018 and 2023.
Based on this analysis, a home purchased in Seattle for $750,500 back in 2018 would be worth around $842,000 in today’s market. That means it would have appreciated by $91,500 during the 5 years from 2018 to 2023.
That’s a hypothetical scenario, but it’s based on real data. House values in the Seattle area actually have risen at that pace.
In July 2023, the median home price in the city of Seattle has risen to around $842,000. In the broader metro area (which includes Tacoma, Bellevue and other cities), the median was around $704,600 as of July.
The median household income in Seattle in 2023 is about $144,955, according to Name Census. This is around 30% higher than the state-wide median annual income of $111,431.
This is a significant increase over the past two decades. Compared to 2000’s median income of $45,736, today’s median income represents an increase of 217%.
However, income increases are not as marked over the past 5 years as compared to the past 10 or 20. That said, incomes have increased at a very healthy rate over the years in Seattle, and much faster than home prices in the city.
The median household income in the Seattle metro area rose by about 56% during the 5-year period mentioned above.
This appears to be an anomaly in the US. While home prices have increased over the past few years, they have dropped over the past 12 months. In fact, the Seattle housing market has been considered one of the cooler ones in the US, according to an article in The Seattle Times.
Nationwide, the median home value rose by 54% during the 5 years from 2018 to 2023. By comparison, the median household income in the country rose by 39% during that same period.
Related: Most affordable housing markets in Seattle Metro Area
For many years, home-price growth in Seattle was roughly on par with the nation as a whole. But a housing shortage, coupled with strong demand from buyers, sent home values in the Seattle area skyrocketing for a few years. Then by mid-2022, home prices not only stalled, but even tumbled.
That said, home prices, overall, have risen in Seattle over the past decade.
Prices in Seattle have skyrocketed over the past few years, including in the first half of 2022. But as mentioned, they started to fall at that point. Over the past 12 months, home prices in Seattle actually decreased 8%.
Despite all this, Seattle is still a hot housing market. According to Redfin, properties in the city are still getting about 3 offers each, on average, and are selling in around 2 weeks. Even though home prices here have dipped, they’re still far higher than the national average.
Home prices in Seattle are still some of the highest in the state of Washington. There are plenty of other markets nearby that offer much lower real estate prices, such as Tacoma and Federal Way.
Tacoma’s median home price is currently $475,959, a decrease of 5.5% over the past 12 months. And in Federal Way, the median home price is $565,006, which is 3.5% lower than it was one year ago.In fact, not only do these markets offer prices that are less than half of Seattle’s prices, their markets are also relatively healthy. This could make them an ideal place to buy a home at a lower price while riding the wave of rapid appreciation.
Thanks to these massive increases in home prices over the past few years, homeowners who got into the market earlier have realized significant gains in home equity. Along with regular mortgage payments, Seattle homeowners have been able to take advantage of skyrocketing equity thanks to appreciation in home values over the decade.
That doesn’t mean that it’s too late to get into the market for homebuyers looking to buy a home. There’s plenty of opportunity to benefit from homeownership and the withholding that comes with it.
Today’s rapidly rising interest rates also make homebuying less affordable. As of the third week of July 2023, the rate for a 30-year fixed-rate mortgage was 6.63% in Washington State. Higher mortgage payments mean less money to spend on other things.
Sammamish Mortgage is a family-owned company based in Bellevue, Washington which serves the entire state, as well as the Pacific Northwest region overall. This includes Washington State, Colorado, Idaho, California and Oregon. We have been offering our clients many different mortgage programs and products with flexible qualification requirements to suit the needs of each borrower since 1992. Feel free to contact us today if you have questions about applying for a mortgage.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.