Slower (Not Lower) Home Price Growth

S&P Dow Jones recently released the Case-Shiller Home Price Index for August 2018, revealing that Seattle home price growth continues to slow. Up until just two months before that, Seattle led the nation in single-family home price gains for 21 consecutive months, but that run was ended as Las Vegas took over the lead.

Following the release of the report Seattle Times proclaimed “Average Seattle-area home selling for below list price for first time in 4 years.” The article detailed what they called a “hectic market,” noting that “Seattle-area home prices dropped more than anywhere else in the country, according to the new Case-Shiller home price index.”

This claim is a confusing one, however, which this post aims to correct.

First, when the Index declines, that does not translate into value loss for Seattle / Puget Sound homeowners relative to those in the rest of the country. Looking at the Dow Jones press release, which accompanied the report, Seattle is still among the fastest-growing cities, surpassed only by Las Vegas (with a 13.9% year-over-year increase) and San Francisco (with a 10.6% year-over-year gain). Seattle’s growth? 9.6%.

The Times also reports that “for the first time in four years, the average house sells for a bit below the listing price in Seattle and across the surrounding metro area.”

It should be noted that the Case-Shiller Home Price Index is categorizing Seattle as the Seattle Metropolitan Statistical Area (MSA), which comprises King, Snohomish and Pierce counties. According to Realogics Sotheby’s International Realty research, this region has “seen consecutive months of home prices averaging to selling price discounts from listing prices twice in the past four calendar years.” Looking at single-family homes, price discounts on homes began in July 2014, not May of that year.

The article also touches on bidding wars, but as Dean Jones, president and chief executive officer of RSIR noted in a recent “Trendlines vs. Headlines” post, “We focus on the economic trendlines and not the headlines. This normalization trend in housing means buyers and sellers are finding greater balance. It’s actually a healthy turn that I think will result in a stable market ahead—and stability benefits both buyers and sellers.”

Lastly, the Times proclaims that “in all, sales prices have dropped nearly 7 percent, or $55,000, in Seattle since the spring.”

Market experts say a drop in prices is not a cause for concern. The market is a seasonal one, and it’s not uncommon for prices to fall from spring to autumn, regardless of market conditions. This has continued to be the case even despite Seattle’s run-up in home prices. Though 23 of the 33 cities RSIR surveyed in this report saw lower prices from August to September 2018, a staggering 28 of those 33 cities experienced higher median home prices on a year-over-year basis. And cities such as Bellevue, Mercer Island and Redmond, which saw lower median sales prices on a monthly basis, also experienced some of the highest gains in recent years.

For Seattle’s comparative performance on the Case-Shiller Index, see the chart of the Index trends below; and for more details, download the S&P Dow Jones Case-Shiller summary report.



There has been an increase in sales and, in effect, decrease in inventory that began in October. I believe the market is stabilizing. The trend graph below represents the number of homes For Sale vs Sold in King County:


The trend graph below represents the number of homes For Sale vs Sold in SEATTLE: