Real estate markets across Washington State are highly competitive right now. Common conditions include rapidly rising home prices, short supply, and fierce competition. Today, we will look at five similarities between the Seattle and Kirkland housing markets as we head into summer 2018.
1. Double-digit price growth year over year
Both the Seattle and Kirkland real estate markets have experienced above-average growth in home prices for the last few years. In fact, house values in both cities have risen by double digits per year. Nationally, home prices rose by an average of 6.5% over the last year (which is much closer to the historical average for the last few decades). So these Washington markets have clearly outpaced the national as a whole.
2. Median home prices above $700,000
According to the latest MLS data and real estate reports, the median home price for Kirkland, Washington rose to around $760,000 this spring. That was an increase of 17.5% over the previous year, according to Zillow. That is a significant rate of appreciation, and it’s something else that Kirkland and Seattle share in common. The median home price in Seattle is currently around $768,000 (as of May 2018), following a year-over-year gain of around 15%.
3. Tight inventory conditions
This is an issue that has caused frustration for a lot of home buyers in both the Kirkland and Seattle real estate markets. There is a severe inventory shortage within both of these markets. The short version is that there aren’t nearly enough homes listed for sale to satisfy the current demand from buyers.
Consider the evidence:
A balanced real estate market is one that has around five to six months of supply, according to economists. That means, in theory, that it would take five or six months to sell all homes currently sale for sale if no new ones came onto the market.
When you sink below this theoretical threshold, you have a market that favor sellers over buyers. And that’s clearly what is happening in both the Seattle and Kirkland real estate markets, as we head into the summer of 2018.
According to recent reports, both of these cities had less than a 1-month supply of homes for sale in April 2018. By comparison, the average for real estate markets across the country was a 2.8-month supply of homes for sale — and even that is well below normal. So both the Kirkland and Seattle housing markets are experiencing chronically low levels of housing supply.
4. Multiple offers, bidding wars, etc.
The supply shortage mentioned above has created a real estate market where bidding wars and multiple offers are a common occurrence. Homes that go onto the market in or around Seattle tend to attract multiple offers within days of the initial listing — if not the same day.
It’s also common for houses to sell above the seller’s original asking price, as potential buyers try to outbid one another. This is the current reality for both the Kirkland and Seattle real estate markets. And it’s something that home buyers will probably have to contend with for some time.
Related: Is Seattle experiencing a bubble?
5. Lightning-fast home sales
Housing analysts use a particular metric known as the “median days on market” to get a feel for how active or sluggish a particular real estate market is. This is basically the midpoint for how long it takes to sell a home in a particular area.
In April 2018, the median days on market in both Seattle and Kirkland was around six or seven days. This means that homes listed for sale in the area spend a median of six to seven days on the market, before going under contract. Nationwide, the median was 37 days during the same time frame. So once again, the Seattle and Kirkland real estate markets are outliers when compared to the rest of the nation.
Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We currently lend in all of Washington, Oregon, Idaho and Colorado. Please contact us if you have mortgage-related questions.