A recent report suggested that the economy in Washington State is the second best in the nation, when compared to all other states and the District of Columbia. This is partly why the real estate market in Washington is so competitive right now, as of summer 2018.
Business Insider: Washington Has Second-Best Economy in 2018
Following an in-depth analysis, the financial news website Business Insider ranked Washington as the #2 economy in the country (among all 50 states and the District of Columbia).
To determine their rankings, the group looked at six measures of general economic and labor-market health for all states and D.C. Those factors included the statewide unemployment rate, job growth, per-capita GDP, GDP growth, average weekly wages, and overall wage growth. Each state was then given a score based on how it performed in these areas.
Washington State was ranked #2, as having the second-best economy in the nation. The District of Columbia was ranked #1, and South Dakota was ranked last.
The top five states (and district) were:
- Washington, D.C.
- Washington State
Regarding Washington State, the editors explained that the “average weekly wage of $1,168 was the second-highest among the states and DC, and its non-farm payroll job growth rate of 2.8% between April 2017 and April 2018 was the fourth-highest.”
Washington has made an appearance on several related lists as well, typically appearing within the top three rankings for economic health and/or growth.
One of the ‘Top States for Business’ in 2017
A year ago, in July 2017, CNBC named Washington as the top state in America for business. They noted that the state’s economy grew by 3.7% the previous year, which was nearly two and a half times the national rate.
Washington also had a relatively high number of patents filed, second only to California. And then there’s the tax situation. The state has no income or corporate income tax. This and other factors help attract companies to Washington, which in turn creates jobs and helps to grow the state’s economy.
As the report’s authors summed it up:
“The home of Amazon and Costco, Boeing and Expedia, as well as rising stars like Adaptive Biotechnologies, online marketplace OfferUp and space company Blue Origin, Washington has the old and new economies covered — as well as pretty much everything in between.”
How It Affects the Housing Market
Local real estate markets and economies often go hand in hand. A strong economy with good wages and jobs can boost demand for housing by bringing more buyers into the market. Strong local economies tend to attract new residents from elsewhere in the state, or from across the country. This too can bolster home prices and boost demand for housing.
Having one of the best economies in the country has done a lot to prop up the real estate market in Washington. It also contributes to the supply-and-demand imbalance that has been affecting the state’s housing market for the last few years. In most cities, there aren’t enough homes for sale to meet the demand from buyers.
There are several factors contributing to this ongoing shortage, but demand is a big part of it. We’ve seen steady demand for housing across the state (rental and purchase), and this is partly due to the strong job market and stable economy in Washington. People who are planning to relocate often go where the employment opportunities are. And the fact that there’s no income tax in Washington State makes it an ever stronger lure.