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?
A July 10th report by CNBC stated that Washington currently has the hottest housing market of any state in the U.S. The article cited data from the Federal Housing Finance Agency, which showed larger-than-average price gains that have occurred across the state recently.
Let’s start with the numbers cited in this report:
- Home prices in Washington climbed by nearly 4% during the first quarter of 2018. That was the biggest gain of any state in the country during that period.
- Those are the short-term gains. The long term is even more noteworthy.
- House values in the state were up by 13% compared to last year. By comparison, home prices nationwide rose by around 7% during the same 12-month period.
The 13% figure mentioned above closely matches data published by Zillow earlier this month. Based on their findings, the median home price in the state of Washington rose by nearly 11% over the last 12 months (as of July 2018).
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 the hottest housing market in the U.S. And we could see more of the same through the end of 2018 and into 2019.
Inventory: The Same Old Story
The CNBC article also mentions the tight inventory conditions that are occuring in real estate markets across Washington State (and in Seattle in particular):
“The situation is especially critical in the Puget Sound area around Seattle, which has added nearly 55,000 jobs in the last year alone, thanks to hiring at big employers like Amazon, Microsoft and Boeing.”
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
This article also discussed the possibility of a real estate bubble in Washington State, 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.”
A July 2018 forecast from Zillow predicted that prices in Washington would rise by around 7% 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. Please contact us if you have mortgage-related questions.