A recently updated forecast for the Tacoma, Washington housing market suggests that home values in the city will likely rise through the end of 2018 and into 2019. Inventory remains low as well.
The Tacoma real estate market might not be as hot as its neighbor to the north, Seattle. But it’s still a highly competitive environment for home buyers. Here are the latest trends and forecasts for the Tacoma housing market in 2018.
A Bold Forecast for Tacoma’s Housing Market
Seattle gets a lot of press for being one of the hottest real estate markets in the country. But Tacoma is also pretty competitive, with a dearth of inventory and high demand. So it’s no wonder home prices in the area are expected to continue climbing.
The housing research team at Zillow recently updated their forecast for the Tacoma real estate market in 2018. They expect the median home value for the city to rise by around 9% over the next year or so. This prediction was published in June 2018 and extends through the first half of 2019.
This summer, Tacoma’s median house price rose to $285,600, following a whopping one-year gain of 14.7%. Despite those large gains, the real estate market in Tacoma is still relatively affordable for being in the Seattle metro area. For comparison: the median home value in Seattle itself rose above $700,000 earlier this year.
Less Than a One-Month Supply of Homes
Like most cities across Washington, Tacoma’s real estate market is experiencing a severe supply shortage. This means there aren’t enough homes listed for sale to satisfy the demand from buyers.
In housing economics, the “absorption rate” is the rate at which available homes are sold during a given time period. It’s often expressed as a monthly figure. For instance, a five-month supply means it would hypothetically take five months to sell all homes for sale if no new inventory came onto the market. A five- to six-monthly supply is considered to be balanced, or in between a seller’s and buyer’s market.
Tacoma, Washington had less than a one-month supply as of April 2018. That’s something it shares in common with most cities in the Seattle metro area. These are housing markets with very limited supply, which in turn leads to multiple offers, bidding wars, and all the rest.
A National Real Estate ‘Crunch’
The nation as a whole is experiencing a real estate supply crunch right now. Across the country, the average supply level was just below three months in April 2018. So it’s affecting home buyers in a lot of markets nationwide. Things are just particularly tight in Tacoma, and other cities in the Seattle area.
According to a June 2018 report from property data company CoreLogic:
“Resale inventory is at the lowest level in more than 18 years and continues to decrease. New home construction hasn’t kept pace with demand [from buyers], and the result is an inventory shortage at a time when demographic and economic indicators are moving upward for the housing market.”
Translation: The current supply-and-demand situation in real estate markets across the country will keep putting upward pressure on home prices for the foreseeable future.
These conditions will probably persist for the foreseeable future. Tacoma’s population has edged upward over the last ten years (though not nearly as much as Seattle’s), and this growth has put more buyers and renters into the market. So housing demand has remained fairly steady. It’s the inventory situation that’s really fueling home-price growth in the area.
Disclaimer: This article contains projections and forecasts for the Tacoma housing market extending into 2019. That information was gathered from third-party sources outside of our company, and presented here as an educational service to our readers.