Recent forecasts suggest that the Tacoma real estate market could have the highest level of home-price appreciation in 2019, among the major cities within the Seattle metro area.
Bold Home-Price Outlook for Tacoma, Washington
Housing trends can vary widely from one city to the next, even when those cities fall within the same metropolitan area. That’s the case right now with Seattle and Tacoma. While home prices in Seattle are clearly much higher, they’re rising faster in Tacoma.
And a recently published home-price outlook suggests that Tacoma could lead the way in 2019, posting bigger gains than other cities in area.
To come to this conclusion, we looked at the 12-month home-price forecasts for the ten biggest cities in the Seattle metropolitan area (including Seattle itself). The list included Bellevue, Everett, Kent, Renton, Tacoma and other major population centers.
According to the housing research team at Zillow, home prices in Tacoma, Washington:
- rose faster than all of the other cities over the past year, and…
- are expected to continue rising the fastest in 2019 as well.
In December, the company wrote: “Tacoma home values have gone up 13.2% over the past year and Zillow predicts they will rise 10.3% within the next year.”
As of December 2018, the median home value in Tacoma, Washington was $297,600. It will likely rise above $300,000 during the first part of 2019.
Only Big City in the Area With Double-Digit Prediction
In contrast, most (if not all) of the other cities in the Seattle metro area have experienced a lower level of home-price appreciation over the past year. Likewise, they are also predicted to see smaller gains in 2019, when compared to Tacoma.
In fact, the one-year outlooks for most of those other housing markets predicted that prices would rise by somewhere between 2% to 4% (depending on the city). That’s much lower than Tacoma’s forecast for double-digit growth over the next year or so.
Granted, these are all just forecasts. You might think of them as an educated guess, based on current trends and conditions within the housing market. The key takeaway here is that current real estate conditions in Tacoma suggest that the city could experience higher-than-average home price gains during 2019. The question is why?
One Reason: Supply Is Lagging
So why has the housing market in Tacoma, Washington experienced bigger home-price gains than other cities in the area? And why does it have a much bolder outlook for 2019? Much of it can be summed up in a single word — inventory.
Over the past year or so, housing inventory has grown steadily across much of the Seattle metro area. That’s welcome news, given the headline-generating housing shortages of the last few years. But Tacoma’s real estate market still appears to be lagging behind in the supply department.
As of early November 2018, the city of Tacoma had about a 1.5-month supply of homes for sale. (That’s a theoretical measurement used to determine how much inventory there is in a particular area at a particular time.) A more “balanced” real estate market has somewhere around a 4.5 or 5-month supply of homes for sale.
Most other cities in the metro area had a higher level of inventory during that same month.
So when it comes to Tacoma, we are talking about a real estate market with limited supply relative to demand. There are plenty of motivated buyers out there seeking homes, but not enough properties to go around. This kind of imbalance tends to put upward pressure on prices. It could also account for the bolder home-price outlook for the Tacoma housing market into 2019. Contact Sammamish Mortgage Your Local Mortgage Brokers today!