As this year’s spring buying season began to get underway, Seattle-area home prices were climbing at the third-highest rate in the country.
Single-family home prices were up 18.3% in March compared to a year earlier, a sign of how forcefully the market has rebounded since the earliest days of the coronavirus pandemic. Among major metro areas, prices jumped faster only in Phoenix and San Diego, according to the S&P CoreLogic Case-Shiller Home Price Index released Tuesday.
Prices were up 20% year-over-year in Phoenix and 19.1% in San Diego. Seattle spent a year in the No. 2 spot before slipping behind San Diego last month. The Seattle area covered includes parts of King, Pierce and Snohomish counties.
Despite widespread job losses, demand for homes surged during the pandemic as many white-collar workers held onto their jobs and went searching for more space amid rock-bottom interest rates. As demand climbed, the number of homes for sale dropped, driving up prices and pushing homeownership out of reach for more would-be buyers. In Seattle, buyers and brokers have described a year of heartbreak as home shoppers struggle to compete against multiple offers and cash.
Nationally, year-over-year growth in home prices is hitting levels last seen before the Great Recession, according to S&P CoreLogic Case-Shiller. The 13.2% national increase in March was the highest since December 2005.
Nationwide, demand for homes is “trending 20% above 2017-2019 levels,” said CoreLogic Deputy Chief Economist Selma Hepp in a statement.
“With demand in high gear and no respite in sight, home price growth is likely to remain in double digits over the coming quarter,” Hepp said.
Investors also appear to be returning to the home-buying market.
Among the 20 major metro areas Case-Shiller tracks, prices shot up 13.3%, the highest year-over-year increase since December 2013. But Seattle’s recent growth has been more dramatic, even when compared to the month before the pandemic hit. The last time Seattle saw the levels of year-over-year home growth being recorded now — about 16% in February and 18% in March — was in 2006, according to the index.
In the Seattle area, prices spiked most in more affordable Pierce County areas like Parkland, Tacoma, Graham and Spanaway, according to March data from Zillow. For example, the year-over-year jump in typical home prices was nearly 18% in Tacoma compared to 8% in Seattle.
“The pressures that have pushed home prices upward at their fastest pace in years remain in place and prices continue to press higher,” said Zillow economist Matthew Speakman in a statement.
Half of homes for sale in Seattle went pending (meaning the seller accepted an offer) in just five days in the Seattle area last month, and Tacoma was one of the nation’s most competitive housing markets with nearly 74% of homes selling above list price, according to Redfin.