Later (maybe), New York.
Seattle passed all three of those cities this year in the race of the country’s priciest housing markets. For two months in a row, now, the Seattle area has led the pack in home-price growth. To clarify, by “leads the pack,” I mean first place. We’re the fastest growing market in the nation.
Home prices in Seattle are growing at roughly twice the national rate. A typical single-family house here costs about 10.7 percent more than it did a year ago. This might not sound surprising (we’ve been writing about housing prices and growth for the last two years), but here’s what is surprising: before the last two months, Seattle hadn’t been the nation’s hottest housing market since 2007.
So what does this mean? By itself, it’s largely just another statistic. But when we dig closer, we discover:
1) Which homes are hottest?
Starter homes are the most in-demand. Inventory is especially low here, so demand has made starter home prices rise 12.7 percent higher than last year’s mark. By comparison, luxury homes are up just 9.7 percent. If you want to make the transition from your starter home to something bigger & better, now’s the time.
2) How long will this last?
Big-picture, this will last quite a while. The main causes of this housing price increase are fast job growth and a low housing supply. Tech companies will continue to grow and hire, so don’t expect cause #1 to end any time soon. As for cause #2, Seattle only has so much space—we’re surrounded by water, after all. Overall, high home prices are here to stay.
However, our position as THE hottest market in the nation probably won’t last. Home values are expected to slow next year, after the usual frenzy of the year’s opening months. Also contributing to a slowdown: the number of apartments opening, which will reduce the demand to buy houses.