Summary: The price of homes in Washington state have exploded in recent years, as has demand. But what will 2020 bring? This article will get into more detail about housing market in Washington this year.
According to forecasts,the real estate market in Washington State will continue to be relatively strong into 2020. Zillow predicts that prices in Washington state will increase 4.8% over the next year. The market in Washington state is currently very hot, and the local economy is strong with growing populations. Average markets have no more than two month’s supply of homes, and sometimes even less than one month supply.
Tacoma: Hottest Housing Market in Washington
Seattle has long been known as the hottest market in Washington state and among the hottest in the entire country. But over the past few months, the market in Seattle has actually cooled. In fact, median home prices in Seattle have dipped 0.7% over the past 12 months, though they are expected to rise by 3.9% over the next year.
On the other hand, Tacoma‘s home prices have spiked 7.1% over the past year and are expected to rise another 4.8% over the next 12 months. Tacoma’s real estate market is also very hot right now, much like the statewide market.
It seems as though the heat went from Seattle to Tacoma, and that buyers are getting tired of the continued skyrocketing prices of homes in Seattle. Most buyers aren’t able to keep up with the prices and can’t compete with high-income buyer.
As such, many buyers are setting their sights on Tacoma. In fact, there have been more bidding wars in Tacoma over the recent past then there have ever been. And this heat is expected to continue in the area.
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 these trends are likely to continue throughout 2020.
According to the real estate data company Zillow, the median home value for Washington rose by around 4.9% over the past year to the current median price of $419,900 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 continue at the same pace over the coming months.
Related: How much is my home worth?
Inventory is the real story in this market. Housing supply is limited in most cities across the state, particularly in the King County area where there is barely a one month supply in the county. A “balanced” real estate market has around a five- to six-month supply of homes for sale. But most markets across Washington State don’t have anywhere near that amount, but instead are hovering somewhere around the 2-month supply mark.
Need a Home Loan in Washington?
Are you looking to apply for a mortgage to buy a home in Washington State? Sammamish Mortgage is here to help. We have served home buyers and homeowners across the state for about 28 years. We are a family-owned company based in Bellevue, WA, and provide mortgage programs for borrowers across Washington, Oregon, Idaho, and Colorado. Please contact us if you have questions about getting a mortgage loan in Washington.