What’s got Amazon, the Space Needle, and America’s hottest housing market? That would be Seattle.
The median price of a single-family home in Seattle jumped 12.9% year-over-year in September, according to the most recent S&P CoreLogic Case-Shiller Home Price Index. The West Coast city’s big price gains are more than double the national, annual increase of 6.2%. Nationally, median home prices were also up 0.4% from August as well.
(The report looked only at existing, detached, single-family homes and not newly constructed residences.)
Seattle’s boom is a result of its thriving economy and bounty of good-paying jobs, many in the tech industry. The median home price in the city is $650,000, according to realtor.com® data. That’s more than double the national median of just under $275,000.
“It’s supply and demand,” says Robert Macdonald, a real estate broker with Lake & Co. Real Estate in Seattle. “There aren’t enough homes for sale.”
Builders are constructing more residences, Macdonald says. But they’re not enough, as more folks keep moving in.
“A lot of millennials are coming into town because of the good jobs and buying their first homes,” he says. “And a lot of people are doing well in their careers and upgrading.”
As a result, Macdonald says, at least half of home sales stir up multiple offers—and that nudges prices all the way up.
“A dozen offers on a property is not uncommon,” he says.
The West is powering the price gains, and it’s not just Seattle. Las Vegas; Denver; Portland, OR; San Francisco; and San Diego all posted annual increases of 7% or more, as a result of their strong economies and limited numbers of homes on the market. Price gains in Boston; Dallas; and Tampa, FL, also exceeded the 7% threshold.
Prices are rising at a cooler pace in the Midwest and East. New York; Atlanta; Washington, DC; Miami; and Chicago all had price gains of less than 6% annually.
As prices have risen, home values nationwide have mostly recovered from the real estate bust that began a decade ago.
Prices nationwide are likely to keep rising, says realtor.com’s Chief Economist Danielle Hale. Low mortgage rates (still hovering around 4%) and a strong job market are expected to spur more people to search for homes. And millennials are at the age where they’re finallysettling down and buying homes.
“There’s a lot of demand in the market, and new construction is having a hard time keeping up,” she says.