In some ways, 2019 will be the “year of the buyer” in Seattle’s housing market. Not since the mid-2000s have we seen such favorable conditions. Inventory remains tight, but many other factors point to a great year for local home buyers. Along those lines, here are three big predictions for the Seattle housing market in 2019.
Predictions for Seattle Housing Market in 2019 and Beyond
Sensing a slowdown in the market, home sellers could be more likely to lower their prices. House values could rise more slowly, or even flatline for a period. And a rise in housing stock will create a better balance between supply and demand. Those are three data-based predictions for the Seattle real estate market through 2019.
1. We could see more price reductions from sellers.
Two or three years ago, price reductions were a rarity in the Seattle real estate market. As long as sellers priced their homes close to comparable sales, they were practically guaranteed to have buyers lining up. And in many cases, those buyers were making offers well above the asking price.
But a lot has changed since then.
Over the past year or so, there has been an increase in the number of home sellers reducing their list prices. This is just one of several signs that the local real estate market is beginning to change.
In early spring 2018, only 5% of all homes listed for sale in the Seattle metro area had a reduced listing price. But as of November 2018, about 22% of real estate listings were being marketed at a reduced price. That was the highest level of price reductions going back nearly a decade. This is based on data provided by Zillow earlier this year.
So that’s one prediction for the Seattle real estate market in 2019. We will likely see a continuation of this trend, as sellers realize there is less demand from buyers.
2. Home prices will rise more slowly than in years past.
As shocking as it may seem, some forecasters are predicting that home prices in Seattle will remain level throughout 2019. Others have predicted only a slight increase over the coming months. Others predict a dip in values.
While such forecasts are far from being certain, they do signal a change in the local real estate market. Back in 2016, home prices in Seattle were rising by double digits year over year. So it’s a significant shift to see some housing analysts predicting small gains in 2019.
The latest update to the Case-Shiller Home Price Index (published on December 26, 2018) showed that house values in Seattle dropped slightly from August to September, and again from September to October. When averaged over a year, prices rose by 7.3%. But the month-to-month dips indicate that the formerly red-hot real estate market is cooling.
According to some, this is more of a “market correction” than a sign of impending collapse. Prices in this market need to slow down, to prevent further erosion of housing affordability. From a long-term economic perspective, a cooling trend could be viewed as both necessary and beneficial.
So there’s a second prediction for the Seattle housing market in 2019. Home prices will rise more slowly, especially when compared to the double-digit growth recorded a couple of year ago.
3. There could be a better balance of supply and demand.
Over the last year or so, inventory has been the big story within the Seattle-area real estate scene. We’ve reported on this several times in the past, because it’s a big deal for home buyers.
Here’s the good news: After suffering from years of record-low inventory levels, the Seattle housing market is now experiencing significant inventory growth.
According to the Northwest Multiple Listing Service, the number of homes for sale across King County has skyrocketed over the past year or so. The number of active listings (homes on the market) doubled in November 2018, compared to a year earlier.
On December 6, the group reported:
“King County registered the biggest [inventory] gains, with active inventory surging 135 percent from a year ago. The number of single family homes more than doubled from a year ago, rising from 1,879 to 4,020, while the condo selection more than tripled, jumping from 355 active listings twelve months ago to last month’s total of 1,221.”
So it’s a fairly safe prediction to say that buyers within the Seattle-area real estate market will have more properties to choose from in 2019. In fact, it’s happening already.
Disclaimers: This article contains housing-related predictions that are based on current conditions, and those conditions could change over time. These forecasts are the equivalent of an educated guess and should not be viewed as certainties.