Summary: Washington has long been a desirable state to live in and invest in. And as of fall 2019, it continues to be a hot housing market as compared to other centers across the nation.
The real estate market in Washington State is in the news again, this time being singled out as the hottest housing market in the country. A recent report from CNBC pointed to above-average price gains and scant inventory as being two of the leading factors that make Washington the hottest housing market in U.S.
Of course, this probably won’t come as any surprise to real estate agents, home buyers, and others who are actively involved in real estate markets across the state.
Is Washington the Hottest Housing Market?
While not all cities in Washington state are necessarily experiencing a hot real estate market right now, some certainly are, and that includes Tacoma. According to an article published in the Seattle Times recently, Tacoma is now the hottest housing market in the country.
Let’s start with the numbers cited in this report:
- 49.7% of homes sold in Tacoma in May sold for more over asking price, compared to 37.8% in Seattle and 23.8% in the US.
- Home values have risen 8.1% over the past year and are now at $318,900.
- The median home in Tacoma stayed on the market for just 8 days — the shortest in any U.S. city — while inventory of homes for sale is a mere 1.3 months, the lowest in the country.
Nearby metros to Tacoma are also experiencing very hot housing markets, including Federal Way and Lakewood, which have seen increases in home prices of 3.2% and 7.2% over the past year, respectively. And prices are expected to continue skyrocketing, according to Zillow.
No matter which data source you look at, the conclusion is generally the same. Based on year-over-year price increases, Washington State is arguably one of the hottest housing markets in the U.S. thanks to centers like Tacoma, Federal Way, and Lakewood. And we could see more of the same into 2019.
Inventory: The Same Old Story
Tight inventory conditions are also occurring in real estate markets across Washington State (and in Seattle in particular):
The situation is especially critical in the Puget Sound area around Seattle, where the inventory is a mere 1.6-months worth of supply in the four-county region.
Job growth over the last few years has brought more home buyers into the market, boosting demand. A strong local economy is a good thing. But it does tend to attract new residents, and empowers a growing number of residents to purchase a home. And that makes things more competitive.
Not a Bubble, Say Some Economists
There has been lots of talk about the possibility of a real estate bubble in Washington State lately, and Seattle in particular. But rising home values alone do not necessarily point to a bubble situation.
James Young, director of the Washington Center for Real Estate Research at UW, mentioned strong housing demand as one of the factors that alleviates those concerns. “A [real estate] bubble happens when you have the prices going up without the demand going up,” he said. “You’ve still got demand going up in Washington, so I don’t see a huge issue here.”
An October 2019 forecast from Zillow predicted that prices in Washington would rise by around 3.5% over the next 12 months. So perhaps it will remain as one of the hottest housing markets in the U.S. for some time longer.
Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions. Last Updated: [last-modified]