We’ve written before about the tight inventory conditions in Seattle’s housing market. In fact, that was one of the top three real estate trends we identified for 2017. Now, a new report reveals just how much Seattle housing market inventory has dropped over the last five years.
A report published last week by the real estate information company Trulia put Seattle near the top of the list of cities with the largest declines in housing inventory since 2012. Seattle was ranked #2 among the nation’s 100 largest metropolitan areas, second only to Salt Lake City.
The number of homes for sale in Seattle has decreased by 66.6% since 2012, according to the report.
Seattle Housing Market Inventory Reduction, 2012 – 2017
Here are the five housing markets with the largest drops in total inventory since 2012. The percentages shown by each city indicate how inventory (the number of homes for sale) has changed from Q1 2012 to Q1 2017.
- Salt Lake City, UT: -69.5%
- Seattle, WA: -66.6%
- San Diego, CA: -66.5%
- Nashville, TN: -66.0%
- San Jose, CA: -63.5%
The report also showed that the cities with the highest degree of inventory reduction have experienced significant increases in home prices over the last few years. That’s not surprising, because this kind of supply-and-demand imbalance typically puts upward pressure on home prices.
According to the authors: “Housing markets – including San Francisco, Seattle, Nashville, Tenn. and Colorado Springs, Colo., – which have had greater home value recovery since 2012 have experienced larger decreases in inventory.”
Seattle’s real estate market inventory crunch is partly why home prices have risen so much over the last couple of years. House values in and around the city are currently higher than they’ve ever been before. According to Zillow, the median home price in Seattle rose by 11.4% over the last 12 months to land at $624,700.
According to Trulia, the value of Seattle’s housing stock is now 12% higher than it was during the peak reached before the last recession.
The tight inventory in Seattle’s housing market will keep things competitive for the foreseeable future. Current and planned construction in the metro area has increased over the last year, but it is still falling short of demand. This will likely keep home prices moving north through 2017 and into 2018, though possibly at a slower pace than in recent years.
Trulia’s chief economist Ralph McLaughlin says these trends are both good and bad for area homeowners:
“Recovering home values have proven to be a double-edge sword,” McLaughlin said. “While homeowners across the country are thrilled to regain equity in their homes, many have not been in a hurry to trade up. This has added to the inventory gridlock that ties up would-be starter-home inventory from ever coming on to the market, further constraining supply and decreasing affordability.”
Tips for Buying a House in a Tight Market
Given the tight inventory situation in Seattle’s real estate market, home buyers need to bring their ‘A’ game. Competition is high, especially for desirable properties in popular areas. But there are things you can do to improve your chances for success.
- For starters, check out our Seattle home buyer’s survival guide. It offers a wealth of tips for succeeding in this hot market.
- Getting pre-approved for a mortgage loan before house hunting will give you a leg up in the market. Sellers will be more likely to accept your offer if it comes with a pre-approval letter.
- Narrowing your home search will increase your efficiency, thereby improving your chances for finding a suitable property. Research the market ahead of time, with an eye of recent sales prices. Limit your search to the kinds of properties you can realistically afford, based on your pre-approval and/or personal budget. Don’t waste time shopping above your price range.
- Quibbling with the seller over “nickels and dimes” or minor inspection issues could cause the home to slip through your fingers. You can bet there are other buyers waiting in the wings. So when you find a realistically priced property that meets most of your needs, seize the day!