Just when it seems like Seattle’s home prices couldn’t possibly go any higher, the S&P/Case-Shiller Index releases its monthly housing numbers. According to Tuesday’s release, Seattle-area home prices rose 2.3 percent in March, the second highest monthly gain of any city in the national index, trailing only San Francisco. That is up significantly from the 0.9 percent increase in February. The year-over-year change in March saw Seattle-area home prices gain 7.5 percent, which put us just outside the top five cities in terms of yearly gains. Yet again, San Francisco topped the list with a 10.3 percent increase, followed by Denver, Dallas, Miami, and Tampa. According to The Seattle Times, September 2008 was the last time Seattle’s index was at its current level (ominously, the same month Washington Mutual failed).
The question on everyone’s minds, especially in cities seeing double-digit gains, is whether we’re in the midst of another housing bubble, but S&P Dow Jones Indices Managing Director and Chairman David Blitzer does not believe that’s the case. Despite the steep gains in local markets, Blitzer says the national market is actually moderating. Whereas the national price index saw a yearly gain of a staggering 10 percent in February 2014, this month’s report showed a gain of less than half that, at 4.1 percent. He says that even though that 4.1 percent gain is far higher than the average rise in inflation-adjusted home prices of 1 percent per year (since 1975), the fact that the rate of increase halved from 2014 to 2015 signals a return to moderate gains. He says “I would describe this as a rebound in home prices, not a bubble and not a reason to be fearful.” National housing prices are still 15 percent below their peak during the housing bubble.
The numbers for Seattle, however, come on the heels of a report from Redfin citing that the number of Silicon Valley residents searching for homes in Seattle has more than doubled over the past year. Likely pushed out by the Bay Area’s 10 percent jump in prices, transplants looking for homes in Seattle are adding even more pressure to the area’s extremely tight housing market, where the median home is selling in just 39 days in April, according to the National Association of Realtors.
If you are looking to buy or sell a home in the Seattle area, contact your local real estate agent today.