Most of the price growth in this month's report came from the outer edges of the region, from Tacoma to Everett, as buyers look for places more affordable than Seattle proper.
Homebuyers looking in Seattle and the Eastside have had many more homes to choose from lately and have even seen prices drop significantly from their record-setting spring highs. But take a drive into the outer areas of the Puget Sound region and other neighborhoods where prices are much lower, and it still looks mostly like the same old competitive market.
Single-family home prices across the region that includes King, Snohomish and Pierce counties grew 12.1 percent in July from a year prior, the second biggest jump in the country, according to the monthly Case-Shiller home price index, released Tuesday.
But the metro-wide increase was primarily driven by a 16 percent bump among the cheapest one-third of homes in the metro area — that is, anything selling for under $410,000. Those houses are mostly located in the outer edges of the region, in places like Tacoma and Everett. That jibes with broker reports here about how buyers have retreated from the most expensive areas as they bump up against the limits of what they can afford.
“The difference I guess is just our price point is just so much more affordable,” said Dick Beeson, principal managing broker for RE/MAX in Gig Harbor, Pierce County. In terms of prices, “we’re half of what you guys are” in Seattle.
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Beeson noted that while the number of homes on the market in King County is up 66 percent in the past year as more homes sit unsold for longer, the inventory bump in Pierce County was a mere 7 percent. He’s still seeing buyers from “up north” come down to the Tacoma area where homes look cheap by comparison.
Compared to record highs reached in the spring, prices have dropped $57,000 in King County but just $3,000 in Pierce County.
Craig Forehand, branch manager of the John L. Scott brokerage in Lynnwood, said buyers have been coming into Lake Stevens, Everett and other cheaper parts of north Snohomish County looking for bargains, as well.
“The Eastside and Seattle markets, the prices have gone up so high that people are looking up here,” Forehand said. “The further north and the further south you go, people are willing to take that extra commute.”
Still, there are signs that the cooling in Seattle could be spreading outward. The recent inventory bump in Pierce and Snohomish counties, while relatively small, reverses a yearslong decline in the number of homes for sale in both counties. And sales are starting to drop on a year-over-year basis in Pierce and Snohomish, as well, indicating weaker demand from buyers.
Both Beeson and Forehand agreed prices have crested for the year in the outer edges of the region, although that almost always happens this time of year.
The Case-Shiller data released Tuesday is the first report since last month’s noteworthy release, when Seattle was dethroned as the nation’s hottest housing market for the first time in nearly two years (by Las Vegas, which remains No. 1.)
Single-family home costs across the region didn’t budge on a month-over-month basis — the first time prices didn’t grow in the month of July since 2009, when the housing bust was in full swing. Looking closer at the Case-Shiller report, prices dropped a bit on a month-over-month basis for the priciest homes and ticked up slightly for cheaper homes.
Even the annual 12.1 percent increase is a bit deceiving because the Case-Shiller index is a rolling average designed to avoid huge swings each month; so the latest result includes home sales as far back as May, when the market was still chugging along. In any case, the annual gains are down from 12.8 percent in last month’s report and 13.6 percent two months earlier, the largest slowdown in four years.
The number of home sales is dropping at a faster clip in Seattle than anywhere else in the country, according to Redfin. The brokerage also said Seattle had the nation’s second-biggest increase in the number of homes for sale — not because new houses are coming onto the market, but because they are sitting unsold for longer.
The median house costs $669,000 in King County, $492,000 in Snohomish County and $352,000 in Pierce County. All are down from the record highs set in the spring.
The national housing market has been tapping the brakes throughout the summer as well, with prices growing 6 percent in July, down from 6.2 percent a month prior — the fourth straight month of declines.