The shifting Seattle real estate market has grabbed headline after headline in recent months, with the Seattle Times making proclamations earlier this week that suggest Seattle’s home prices are dropping faster than any other metro area in the nation. Contrary to headlines, however, trendlines point to a much different outcome, indicating slowing—not lowering—home price growth, amidst rising inventory and typical seasonal trends for the region. So, what does this mean for homebuyers in the Emerald City?
As has been reported over the past few months, inventory is on the rise in the Seattle Metro Area, which means more options for buyers and less frenetic conditions than the competitive, run-up bidding wars that were commonplace even just six months ago. This is one factor contributing to slowing home price growth, with the latest S&P Case Shiller Home Price Index (analyzing data from September 2018) showing an 8.4 percent year-over-year increase in home prices, placing it behind only Las Vegas and San Francisco, which reported 13.5 percent and 9.9 percent growth, respectively.
As we move into 2019, the realtor.com® economic research team reports that inventory is likely to continue its upward trajectory, with a rise hovering somewhere around 7 percent next year. This is, of course, welcome news to buyers, who will continue to benefit from more choices when it comes to homeownership. The report names five cities most likely to see notable increases in luxury home inventory—all boasting lucrative tech and strong economies—that includes Seattle, which may see double-digit growth in the coming year.
Despite inventory gains, affordability remains a point of concern for homebuyers, as mortgage rates are on the rise. We are currently hovering around 5 percent, and according to the realtor.com report, we could see them soar to 5.5 percent by the end of next year. “That means the monthly mortgage payment on a typical home listing will be about 8% higher next year,” which will hit first-time buyers the hardest, as they don’t have the ability to draw on home equity and tend to borrow more heavily than those that have already purchased real estate.
If you’re considering making a move in the new year, we’d love to chat with you about it! Whether you’re a millennial or first-time buyer, a seasoned investor, or somewhere in between, we’re here to help you navigate the process and step into homeownership.