Seattle Real Estate News

Why are home prices in Seattle so high so quickly?  The answer is simply - supply and demand.  There are just not enough inventory for sale. In King County last month, 2,000 homes were for sale last month (on average for the last two decades, the region had more than 7,800 homes for sale.)  On average, today's homeowner who sells has owned the home for about 10 years and makes about 64% return on investment (4th highest in the nation). The problem is people who are staying in the area would have to turn around and buy in the same crazy market. Thus, only people who are moving to a cheaper area or downsizing have real financial incentive to sell reducing the number of home sellers. Seattle homeowners also wait longer to sell than anywhere else in the country.   

In addition to not having enough inventory for sale, the demand side is not helping either. King County's population has grown 26% and job growth of 28% which translates that people who are moving here  are financially well off to buy a house. It all adds up to people making a lot more money fighting over a lot fewer houses. Historically, the county had 1 home for sale for every 230 people. Now, there's one home available for every 1,060 people creating bidding war beyond what a home should be worth. 

Are we setting ourselves for another real estate market bubble? Most critics agree that there are not clear signs of another crash because the elements causing previous housing collapse i.e. rampant subprime lending and home owners over extending themselves with  a "liar (stated income) loan"  are not presence this time around. Lenders now are lending to people with good credit and full income and asset documentation. 

Start your Seattle home search here

 

 


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