On and on it goes, the continuing ascent of Puget Sound home prices.
While prices are rising across the country, the S&P CoreLogic Case-Shiller Index for April 2017 shows the Seattle metropolitan region again out in front of all others tracked by the index, including other Pacific Coast gateway cities. The city registered a 12.9 percent year-over-year price gain that month, compared with increases of 9.3 percent in Portland, Oregon; 6.6 percent in San Diego; 5.3 percent in Los Angeles; and 5.0 percent in San Francisco.
A shortage of condominiums in the city resulted from developers’ decisions to overwhelmingly prefer building rental housing after the subprime bust a decade ago. In fact, research by Realogics Sotheby’s International Realty (RSIR) suggests the total distribution of new housing in downtown Seattle is likely to result in 94-percent rental vs. 6-percent for-sale in the current decade, Projects like NEXUS, the only new construction, high-rise development available as offered by Burrard Group and RSIR, are being launched to resolve this shortage, which comes as housing demand for both apartments and condos are rising in Seattle. New resident migration to the city is now outpacing inflow to all the rest of King County. (1)
Prospective home sellers could hardly be happier with the skyward arch of prices in our region.
It’s a different story for renters. The Seattle Times reports that “average rents across King and Snohomish counties have been on a steady climb this decade, rising a total of 63 percent since 2010.” (2) Furthermore, Seattle rents are growing eight times faster than the U.S. average despite the record construction boom here.
Tenants often find homeownership to be a path of escape from rising rents. Yet for some of these would-be first-time homebuyers, the door to homeownership in parts of Bellevue and other prime Eastside locations has already closed, with median home prices having breached the one million dollar threshold. As reported by RSIR in April, KING5 News has documented how shoppers are traveling as far north as Marysville in order to find homes that they can afford.
See the chart below; and for more details, download Case Shiller’s summary report.
Source: S&P/Case-Shiller and RSIR – For eight months in a row the Seattle metro area has dominated the US housing market with the fastest-growing median home prices that appear to be accelerating.
Source: O’Connor Consulting Group – the distribution of rental vs. for-sale for the current decade is anticipated to be a ratio of more than 9:1.
(1) Gene Balk, “Seattle added more people last year than all of King County’s suburbs combined,” Seattle Times, 29 June 2017.
(2) Mike Rosenberg, “Rent hikes slow around the country, but surge again in Seattle. What’s going on?” Seattle Times, 27 June 2016.