A recent housing industry report showed that home prices in Seattle rose by around 177% from 1998 to 2018. That was one of the highest gains among the major metro areas in the U.S., for that 20-year time period.
Seattle-Area Home Values Rose 177% in 20 Years
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 10- or even 20-year period.
Among other things, this allows us to calculate 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.
Zillow recently took the long view by showing how home prices have changed in Seattle and 34 other major metropolitan areas across the U.S., during a 20-year period. Specifically, they calculated the change in the median home value for each metro between 1998 and 2018.
Based on this analysis, a home purchased in Seattle for $200,000 back in 1998 would be worth around $554,600 in today’s market. That means it would have appreciated by $354,600 during the 20 years from 1998 to 2018.
That’s a hypothetical scenario, but it’s based on real data. House values in the Seattle area actually have risen at that pace.
When this article was published, in late October 2018, the median home price in the city of Seattle was around $740,000. In the broader metro area (which includes Tacoma, Bellevue and other cities), the median was around $486,000 as of October.
Incomes Rose at a Slower Pace
The median household income in the Seattle metro area rose by 76.2% during the 20-year period mentioned above. This means that home values in the area have risen almost twice as much as incomes.
Seattle is not unique in that regard. Zillow’s figures for the nation as a whole show a similar trend, with house-price appreciation outpacing income growth. Nationwide, the median home value rose by 98.6% during the 20 years from 1998 to 2018. By comparison, the median household income in the country rose by 52.6% during that same period.
In Seattle, the gap between income and home-price growth is more pronounced than in many other U.S. cities. That’s partly because of the double-digit annual increases in home values that occurred during the middle part of this decade.
For many years, home-price growth in Seattle was roughly on par with the nation as a whole. But an ongoing housing shortage, coupled with strong demand from buyers, sent home values in the Seattle area skyrocketing in recent years. Finally, however, price growth is starting to slow down.
Where Prices Rose the Most
Among the 35 metropolitan areas included in this study, San Jose (California) had the largest increase in property prices. From 1998 to 2018, the median home value in that city rose by a whopping 296%. Prices in other California cities, such as Los Angeles and San Francisco, also rose substantially.
The one thing that all of these real estate markets have in common — including Seattle — is that price growth appears to be slowing. For most U.S. cities, home values are forecasted to rise more slowly in 2019 than in previous years.