The days are getting shorter, and the nights cooler. Fall is just around the corner, and that’s typically when the housing market starts to slow down a little. And it begs the question: Will home prices in Washington State cool down this winter, or will the market remain hot into 2018?
The best way to answer these questions is to look at current supply and demand trends.
In major cities across Washington, there is a serious shortage of housing supply relative to demand. This means that home buyers are competing fiercely for limited inventory.
So while home-price appreciation in Washington might slow down a bit during the fall and winter, we can probably expect house values to keep rising.
Washington Housing Market Will Stay Warm Through Winter
According to an August 2017 report from the Washington Center for Real Estate Research at UW, high demand and low inventory are still the driving factors within Washington’s housing markets. And it’s pushing prices north.
According to the report, the median home sales price in Washington rose to $337,700 during the second quarter of 2017. That was about 6.6% higher than the same period last year. It also represents an all-time high for home prices in the state of Washington, as well as the highest median value ever recorded.
As for the winter months, we could very well see a reduction in the number of home sales. That’s typically what happens during the coldest time of the year. But the real estate market itself will likely remain warm, with sustained competition all the way through the end of the year.
According to one forecast, home prices in Washington State are expected to rise more slowly over the next 12 months than the last. The real estate research team at Zillow recently predicted that the statewide median home value would rise by 4.7% over the next 12 months. This forecast was issued in September 2017 and extends through the same month next year.
Their data indicates that the median home value rose by more than 11% over the last 12 months. So clearly, their economists and analysts expect prices to rise more slowly through the fall and winter of this year, and into 2018.
Supply of Homes Still Below Average
In some ways, the real estate market in Washington is something of a special case. In the state’s major population centers like Seattle, there is currently less than a two-month supply of homes for sale. That’s well below the national average, as well as the average is seen in other states.
This, combined with steady demand from buyers, will probably keep Washington house values rising through the winter and into next year.
According to the UW report cited earlier, 20 of the 39 counties in Washington State recorded record high median home prices during the second quarter of 2017. And yet they continue to climb.
Is New Construction Lagging Behind?
With all of this housing demand in Washington, you would think the home building industry would be ramping. But that’s actually not the case.
During the second quarter of 2017, there were a total of 10,889 building permits recorded. That was 8% lower than the same period a year before. According to the Washington Center for Real Estate Research, “this suggests that construction capacity is tight and longer development pipelines are making it hard for demand levels to be met in the short term.”
In other words, we can probably expect demand to outstrip supply in most housing markets across the state, at least for the foreseeable future. And this will continue to put upward pressure on home prices in Washington, even during the winter months of 2017.
Disclaimer: This article includes forecasts, data and trends provided by third parties not associated with our company. We have compiled this information as an educational service for our readers.