If there’s one thing we can say will always apply to the real estate market, it’s that the market will always change. It’s simply a mistake to assume that things will remain stable for any period of time. Even when things do stay stable for a bit, this can’t be taken to necessarily mean that things will continue to be stable into the distant future. Many poor real estate transactions have occurred without taking this fact into account. In the greater Seattle area, we’ve seen some pretty spectacular changes in this last decade. In the past 5 years, Seattle home values have jumped considerably; today, home values in the Seattle area are among the most valuable (on average) in the U.S. When you consider how things have developed here in the Pacific Northwest, this is a pretty remarkable thing. It wasn’t too long ago that Seattle was a small, relatively unknown city. The fact that it’s now mentioned alongside major metropolitan markets in the U.S. is pretty incredible.
But even though Seattle’s growth has been impressive, we would still be foolish to assume that past trends automatically predict future trends. In this post, we will briefly go over some recent data on home price trends over the course of the last 12 months. As we will see, Seattle continues to move upwards, but not quite at the same pace as we’ve seen in other years.
Pace of Growth Slowed in Last 12 Months
According to recent data, during the 12 months between March of 2018 and March of 2019, Seattle area home prices rose by 1.6%. This is a substantially lower rate of increase than the previous 12 month period, during which home prices rose by a very impressive 13%. Among the 20 cities whose home prices were cataloged by the S&P CoreLogic Case-Shiller index, only 3 of the 20 cities showed slower rates of growth than Seattle (San Francisco, San Diego and Los Angeles).
Seattle’s Rate of Growth More Consistent with National Trends
Seattle’s 1.6% growth rate is closer to the average rate of 2.7% seen over the same time period by the S&P CoreLogic Case-Shiller index. The 20 cities in this index are meant to provide a reasonable picture of what’s taking place throughout the country as a whole. This means that Seattle’s rate of growth during this most recent 12 month period is more consistent with what’s taking place at the national level. In other recent years, Seattle’s home market has outpaced trends seen at the national level. For instance, the 13% growth rate seen in the year prior to this most recent year was considerably higher than the 6.7% growth rate measured by the S&P home price index during that same period.
More than anything, we should look at these facts and be sure to stay aware of them when we make home buying or selling decisions. These facts shouldn’t determine your decision in any given case, but you should be aware of them so you can have a sense of where things may be headed in the future. You may come across a gem which will in fact keep rising in value faster than other homes. You may run into something which will likely be a great investment, despite these wider trends. It all comes down to doing your homework. That’s something that we here at Cobb & Associates take pride in.
Image credit: Rob Bertholf