Written by William Hillis, Research Editor, RSIR
In March 2018, the Seattle metropolitan region again widened its lead among major U.S. cities on the S&P CoreLogic Case Shiller Home Price Index to 13.0 percent year over year from a revised 9.88 percent in February. The region has thus maintained the fastest residential price growth in the country for at least 19 months. Moreover, the March 2018 price leaped by 2.84 percent from February, the strongest monthly gain in nearly five years—since May 2013 (3.15 percent). The average monthly increase over the past year remains greater than one percent.
Seattle’s year-over-year increase continues to outpace other Pacific Coast gateway cities. San Francisco was the closest competitor on both a monthly and year-over-year basis, with price gains of 2.15 percent and 11.34 percent, respectively. Los Angeles, San Diego, and Portland remain in single digits on both measures.
In the official Case Shiller report from S&P Dow-Jones, David M. Blitzer, Managing Director and Chairman of the Index Committee observed, “Seattle continues to report the fastest rising prices at 13 percent per year, double the National Index pace.”
Dr. Blitzer dismissed concerns that nationwide home prices are getting ahead of the market. “Looking across various national statistics on sales of new or existing homes, permits for new construction, and financing terms, two figures that stand out are rapidly rising home prices and low inventories of existing homes for sale. Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s, before the housing boom and bust. Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising. Compared to the price gains of the last boom in the early 2000s, things are calmer today. Gains in the National Index peaked at 14.5 percent in September 2005, more quickly than Seattle is rising now.”
Around Puget Sound, low inventories have escalated home prices and remarkably reduced market times of homes for sale. This is indicated by the decline in cumulative days on market, or CDOM, of homes sold in comparative periods in recent years. The first chart below shows the number of sequential first-quarter selling transactions for both residential and condominium sales across price brackets in King, Snohomish, and Pierce Counties combined, along with the median CDOM for those respective brackets. Note that in 2018 Q1, more homes in this region were sold in the $750,000 to one-million-dollar bracket than were sold for less than $250,000; and that the former of these price brackets also saw the fewest days on market.
For Seattle’s comparative performance on the Case-Shiller Index, see the second chart below; and for more details, download the S&P Dow Jones Case-Shiller summary report. And for details on the implications for homes in your neighborhood, contact a local RSIR broker for their latest analysis.