It’s official, folks.
Seattle’s housing market is the hottest in the nation, according to new data from The S&P Case-Shiller National Home Price Index. Home prices in the Seattle region rose 11 percent between September of 2015 and 2016, inching past Portland which saw 10.9 percent year-over-year growth.
Seattle’s booming technology industry is driving record population growth as transplants flock to the region for jobs. Those newcomers tend to be skilled recruits, meaning they can afford pricier homes.
As GeekWire has reported, there are now more than 80 engineering offices in the Seattle area operated by large tech giants, including fast-growing offices for Facebook, Salesforce, eBay and others. Homegrown tech companies such as Amazon.com, which now employs more than 25,000 people in the Seattle area, also are adding to the boom.
That combined with a demand for homes that outpaces supply accounts for soaring prices. Foreign buyers, particularly out of China, also contribute to Seattle’s housing crunch.
Although many long-term Seattle residents are feeling squeezed out by rising home and cost of living expenses, the region is still behind the Bay Area … for now.
“We are playing catch up to other West Coast gateway markets like San Francisco where the trends are playing out like deja-vu here in Seattle,” said Dean Jones, Principal and Owner of Realogics Sotheby’s International Realty. “If you simply look at our median household income, spurred in no small part by the strong tech market, and then divide that into the median home prices of our region, you can see we have a long way to rise before finding balance with the Bay Area.”
We are playing catch up to other West Coast gateway markets like San Francisco where the trends are playing out like deja-vu here in Seattle, Portland, and Denver — two other cities with robust tech scenes — experienced the second and third highest year-over-year gains among the top 20 U.S. cities in the S&P/Case-Shiller report.
September was a strong month for home prices across the nation. The Case-Shiller Index reported a national annual gain of 5.5 percent in September, surpassing its peak in July 2006 at the height of the housing boom.
“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance” David M. Blitzer, Managing Director and Chairman of the Index Committee, said in a press release.
According to Zillow’s index, home prices in the broader Seattle region were $409,900 in September. In King County, the median value was $518,400 and in Seattle proper home values were starting at $611,500.
The rising prices, coupled with low supply, have discouraged some house-hunters.
In October, the number of Redfin customers across the U.S. requesting home tours fell 3.7 percent from September. The number of customers making offers on homes fell 5.9 percent, according to Redfin data.
“One likely culprit is a shortage of homes to choose from, something that has put a damper on homebuyer enthusiasm month after month,” Redfin said.