It’s now definitive: Before coronavirus hit, the Seattle area’s home market was hotter than almost anywhere else in the country.
In February, home prices around Seattle were increasing at 6% year-over-year — faster than any major city in the country save Phoenix, according to the latest release of the S&P CoreLogic Case-Shiller Home Prices Index. The last time Puget Sound saw relative growth that strong was in autumn 2018. And in February, Seattle-area home-price gains topped the national average of 4.2% for the third month in a row.
U.S. home-price gains in February were “broad-based,” S&P Managing Director Craig Lazzara said in a statement. Nearly all of the 20 cities the Case-Shiller Index tracks saw accelerating prices, both year-over-year and month-over-month. In Seattle, home prices grew 1.3% from January to February, compared to an 0.8% bump the previous month.
The pandemic, though, is likely to change all that. What Zillow economist Matthew Speakman called a “promising spring for housing” has been disrupted by “the economic carnage that’s occurred since, particularly in the labor markets.”
The beginning of 2020 showed a marked acceleration in housing prices in King, Pierce and Snohomish counties. In 2019, home prices in the city hovered between growth and decline. But by late 2019, prices began once again to rise. By January, the Seattle area posted the third-highest growth among the 20 Case-Shiller cities; in February, the city rose to No. 2.
The February data for Seattle’s environs show a layer-cake market, with large disparities in price growth between more- and less-expensive homes. The lowest tier of the market saw the highest growth: Homes selling for less than roughly $427,000 charted a nearly 10% jump in pricing year-over-year. Meanwhile, more-expensive homes — those selling for more than roughly $641,000; in Seattle proper, the majority of homes — saw prices rise 4% compared to the same time last year. Homes priced between those two points clocked a 6% rise.
It remains to be seen just how much the coronavirus pandemic will affect the housing market. The Case-Shiller index lags by two months. Next month’s release of March data will provide a clearer picture of how early outbreaks changed pricing — though some evidence suggests that at least in Washington, home sales activity was largely unchanged in the first weeks of what, by March 11, the World Health Organization had declared a pandemic.
Yet early indicators from the first weeks of the April market suggest that new listings and pending sales are down by roughly half from 2019 levels, at least inside the Seattle city limits, according to Northwest Multiple Listing Service data. A more complete picture will emerge when that organization releases its monthly home sales data on May 6.