Seattle Housing Market Predictions for 2018
What a year! In 2017, Seattle saw a full year as America’s hottest housing market. This year’s local real estate market seems like an elevator that only goes up with no perception of the top floor.
Now that 2018 is nearly here, it’s time to look back and review this year to determine what we can expect moving forward. If it’s anything like the last 12 months, we could be in for even more housing cost growth, more projects for builders, and a continued imbalance of supply and demand for homes.
According to The Seattle Times, the current average median price for a home in Seattle is $725,000 (as of October 31st, 2017). Assuming a home buyer has an excellent credit score puts down 20%, the down payment is $145,000. That’s before all the other closing costs.
With home prices so high, the supply of affordable houses in the Seattle area is running very low. As of the end of October, there were only five condos for sale in downtown Seattle for under $500,000. These were all small one-bedrooms.
Fortunately, the city of Seattle is reviewing zoning laws and the Mandatory Housing Affordability (MHA) is stepping in. This means there may be a growing focus on affordable and entry-level housing within urban villages in 2018 and beyond. These zoning changes are designed to put an emphasis on developers. They must either build more affordable housing or donate to a fund that goes toward manufacturing them.
Growing Home Prices
In the last year, Seattle has topped the nation in home-price growth at 13.2% at the end of October compared to last year. Some people speculate that Seattle’s rising housing costs are a sign of a housing bubble about to pop. However, economists such as Matthew Gardner believe that the market should hold firm.
According to a recent Zillow survey of over 100 housing experts, the U.S. housing market is expected to increase by another 4.1% in next year. This is a tad slower than 2017’s current 6.9% growth. This could be good news for Seattle. Although our home prices will continue to grow, it likely won’t be as incredible as we’ve seen in 2017.
Lack of Inventory
As housing costs soar, the question becomes why are homes getting so expensive? The answer to that lies primarily in the lack of housing inventory in the city. According to Seattle Bubble, currently sits at 1.07 months (as of October 31st). The lack of inventory we’re seeing today will continue to be the driver for Seattle’s real estate market in 2018.
Why aren’t there enough homes on the market? The answer can be found in a recent Forbes’ article, Why Seattle Real Estate Will Maintain Its Hot Streak, which concludes these reasons for the lack of inventory:
- Seattle’s population growth (it’s growing faster than any other U.S. city)
- Employment opportunities (especially in tech)
- International investors are very interested in the market (particularly from China)
- Seattle’s art & entertainment scene (including The Seattle Art Fair and Upstream Music Festival)
- Seattle’s economic growth is sustainable
At the end of the day, our focus is to help Seattle’s continued growth in a way that keeps our community at the top of mind. Because we’ve grown up in the Seattle area, we are keen on ensuring its growth fosters an environment that fits our unique spirit while also allowing for sustainable growth to continue.
We’re a local family-owned investment firm dedicated to helping move Seattle forward. We help Seattle residents move on by providing straightforward, all-cash offers and flexible closes on homes and providing local builders with opportunities. If you’re a builder or investor looking to get involved with us, contact us today to see how we can collaborate together.
Disclaimer: Beachworks LLC has not conducted any formal research and all points are speculation based on our first-hand experience in the market and hot topics discussed by industry professionals.
Beachworks LLC local, family-owned company in north Seattle committed to improving the value of our community. For those who need to sell their homes quickly and privately, we we provide an all cash offer and close on your timeline.