Summary: Real Estate in the West was booming a couple of years ago, but is it still? This article will outline what the housing market in Washington looks like today and where it’s expected to be in the coming months.
If you are looking to buy a home in the Evergreen State, or are thinking of taking on an investment property in 2020, we’ve outlined some of the trends for you to consider as you research where you might want to buy, and, if you are looking for a second home or rental property, a few factors that you may want to weigh. We’ve included top agent insights and statistics about location and home type, in this rundown of Washington real estate news.
‘Cool’ Seattle Market is Now Heating Up
Years ago, Seattle’s tech sector saw the city as one of the United States’ hottest housing markets — but that changed over the past year and a half. From mid-2018 to mid-2019, Seattle’s housing market cooled and prices dipped quite a bit.
This was perhaps a good thing for buyers, as prices were skyrocketing, leaving many homebuyers priced out of the market.
That said, the market in Seattle is heating up once again. Prices are on the rise, and Redfin has characterized Seattle’s real estate market as ‘very competitive’. Considering this, now may be a good time to buy in the Seattle-area.
In April 2020, the median home value in Seattle started to inch up. The median list price per square foot in Seattle was $517, while the Seattle-Tacoma-Bellevue Metro Area average was $285.
Location, Location, Location
While the Seattle housing market may be the first place that you think of when it comes to the Pacific Northwest, there are other cities worth considering. You may find better returns for your investment if you look elsewhere.
According to Zillow, the median price of a home in Washington State is $422,400. That’s an increase of 5.7% from the same month last year. And that price appreciation trend is expected to continue through to spring 2021 with an anticipated rise in prices of 4.9%.
Zillow characterizes the Washington State housing market as “very hot” right now, and many centers across the state are experiencing the same temperature, such as Tacoma, Federal Way, and Kent. Many buyers who want to be close to the action but don’t want to pay the sky-high prices in Seattle are turning to nearby communities for more affordable housing. This is driving up demand in these cities, and therefore driving up prices, too.
With King County being the most expensive county with an average price of $654,300, more and more people are heading to nearby centers, as mentioned previously. But in addition to Federal Way and Kent – which are both in King County – people are also flocking to Kitsap and Skagit Counties. In Kitsap County, the median home price in April 2020 was $405,900, which is 5.7% higher than a year ago. To the north in Skagit County, demand was just as great. In April, the median home price increased to $390,700, a 4.9% jump.
In Pierce County, the median home price in April 2020 climbed to $386,900, representing a 7.0% year-over-year increase. Pierce County’s relatively large supply of affordable homes are becoming more attractive to priced-out buyers from Seattle and King County. However, buyers should be aware that the Tacoma-to-Seattle commute can add two to three hours a day.
There are many reasons why you might want to consider buying a condo, either as your primary or secondary residence, or as a rental property. And if a condo is what you are after, then you’ll want to examine these trends.
Experts saw falling prices and rising inventory for condos in King County from spring to summer 2019. Condo sales were slow in 2019. In King, Pierce and Snohomish Counties, where the majority of condos are in Western Washington, sales dipped 4.6% compared to the year before. That said, condo sale prices were a mixed bag. Sale prices King County condos declined 4.2% YOY to $405,000, according to an article published in the Seattle Times, while sale prices increased 5.4% in Snohomish County and 10.8% in Pierce County.
However, if you are looking to buy a condo to rent out as a source of income you may want to research city rules first. A recent report from the University of Washington found that nearly 40% of Seattle owners who rent out their condos have sold or planned to sell them, because of frustrations about regulations.
Bad News For Renters, Good News For Landlords
Rent across many centers in Washington State is very expensive. For renters, this will obviously be bad news. But landlords can take advantage of high rent prices to provide them with a sound stream of income.
In Seattle, the median rental across all properties in April was $2,600, according to Zillow. In Bellevue, median rent sits at $2,945, in the same period, while in King County, the median rent is $2,500.
It’s not clear from agent insights or other data whether the area will return to the 2014-2016 upswing, when many neighborhoods in the region endured yearly rent increases of 10% and more. The experts say it depends on several factors, like how quickly new apartments are added to the market.
The key takeaway is that the market in Washington is constantly shifting and if you are looking to buy, it’s best to keep an eye on the trends to be sure that you are making an educated investment for the future.
Need a Home Loan in Washington?
Will you need mortgage financing to buy a home in Washington? We can help. Sammamish Mortgage has been serving buyers across the Pacific Northwest since 1992. We offer a wide variety of mortgage programs with flexible qualification criteria in Washington, Oregon, Colorado, and Idaho. Please contact us today with any financing-related questions you have.