According to a new forecast, the real estate market in Washington State is “set to explode” in 2018. Figuratively speaking, of course. They’re talking about explosive growth in demand and prices.
Veros Real Estate Solutions, a company that provides data-based services to the housing industry, recently published a forecast for the U.S. residential real estate market in 2018. Among other things, the company’s analysts predicted that home prices in U.S. markets will continue to follow an overall upward trend over the next 12 months, “with overall annual forecast appreciation of +4.2%.”
Forecast for the Real Estate Market in Washington
The company also offered a forecast for the real estate market in Washington State, in particular, naming it as one of the markets to watch in 2018. This insight comes from the company’s latest VeroFORECAST, which is a national real estate forecast projecting through December 2018.
The company singled out Washington State as having some of the strongest real estate markets in the country right now, in terms of home-price appreciation. By their prediction, the state is expected to see continued above-average price growth in 2018.
According to the report:
“Washington State is set to boom – occupying all of the Top 5 market spots … Seattle is #1 with expected appreciation of over 12% followed by other Washington markets of Bellingham, Bremerton, Kennewick, and Mount Vernon all near 10%. These markets show no signs of letting up as supply of homes is exceedingly low and population continues to grow.”
That last sentence says it all. The current imbalance between supply and demand has caused significant and steady home-price gains over the last couple of years. Due to population growth and economic improvements, there is plenty of demand within housing markets across Washington (and especially in the Seattle area). But there’s not enough supply to meet it.
Home Buyers Compete for Limited Inventory
There just aren’t enough homes on the market for the amount of buyers seeking them. And this is putting upward pressure on house values statewide. And according to the Veros forecast for the Washington State housing market, these trends could continue throughout 2018.
According to the real estate data company Zillow, the median home value for Washington rose by around 10% over the past year (as reported in January 2018). Historically, going back several decades, house prices in the U.S. tend to rise by around 3% to 4% annually. So the gains seen in Washington State over the last year could certainly be called “above-average.”
Zillow’s economists expect price growth to slow a bit over the coming months. But as with the Veros forecast, they expect that real estate markets across Washington will continue to outpace the nation in terms of price growth.
Inventory is the real story in this market. Housing supply is limited in most cities across the state, particularly in the Seattle metro area. A “balanced” real estate market has around a five- to six-month supply of homes for sale. At the start of 2018, most big-city real estate markets across Washington had less than a two-month supply of homes for sale.