The winter has historically been a calm time for the housing market, but the growing competition for a shrinking number of homes has made home shopping a year-round task.
The King County real-estate market finished 2017 as the priciest year in history. And 2018 is off to an even hotter start.
Single-family-home prices across the county surged nearly 20 percent in January compared with a year prior, the biggest such annual increase in two years, according to monthly home-sale data released Monday by the Northwest Multiple Listing Service.
The price increases left no area untouched: Home values grew 28 percent in the northern part of the county, 19 percent in Seattle, 18 percent on the Eastside, and from 11 to 17 percent across the south end of King County.
Seattle’s median price hit $757,000, the most ever, surpassing the previous record set last summer.
In West Bellevue, the region’s priciest area, prices surged an unthinkable 93 percent in a year, hitting a record high of $2.72 million for the median house.
The typical price across the Eastside — $938,000 — was just a couple of hundred bucks shy of the record set a month prior.
Looking for something cheaper? Unfortunately, there’s more bad news. Condo prices surged 23 percent from a year ago.
“The Seattle-area real-estate market hasn’t skipped a beat with pent-up demand from buyers stronger than ever,” John Deely, a board member for the multiple listing service and the principal managing broker at Coldwell Banker Bain in Seattle, said in a statement. “Open houses are experiencing heavy traffic with hundreds of potential buyers attending.”
The fast start for the year is not a good sign for homebuyers hoping that 2018 might finally be the year the market slows down.
In each of the last two years, January was the cheapest month to buy a single-family home in King County. Prices here just about always surge in the spring and summer as the warmer, longer days pull more people out to view homes, and parents look to lock in an address before the school year starts.
But buyers can’t afford to be picky about when they shop anymore. Plenty of buyers left over from last year are still searching, and the hordes of newcomers moving here for high-paying jobs at Amazon and other tech companies aren’t waiting until the weather improves to buy.
“The truth is, we’re becoming such a year-round market,” said Lisa Molinaro, a John L. Scott broker in Bellevue.
She specializes in corporate relocation and says that part of her business has doubled compared to last winter. “The amount of people coming in has changed the winter market,” she said. “There’s more people coming in and they need to buy in the winter, so the competition has been a little higher.”
The increase in demand hasn’t been met with more supply — just the opposite.
The number of homes for sale across King County dropped 21 percent from a year prior to hit a record low for the month of January.
Seattle last month had the second-fewest homes for sale, relative to demand, of any market in the country, behind only San Francisco, according to RE/MAX.
It’s not that people don’t see the appeal of selling. The average home seller in the Seattle metro area now makes a 64 percent profit, the fourth-highest rate of any region in the country, according to Attom Data Solutions — behind only the California markets of San Francisco, San Jose and Merced. But people in a position to sell are worried about having to turn around and buy a home in the same busy market.
More homes will come on the market starting in March. But that will likely coincide with more buyers hitting the market.
In addition to the big West Bellevue jump, prices soared more than 30 percent year-over-year in North Seattle, Queen Anne-Magnolia, Southeast Seattle, West Seattle, Kirkland-Bridle Trails and Vashon Island.
No area in King County had a drop in home prices compared with a year prior. But Mercer Island and Enumclaw both saw prices tick up just 1 percent.
Altogether, King County’s median price of $628,000 has roughly doubled since it fell to $315,000 in January 2012, at the bottom of the market. And prices are up 45 percent over the old bubble high a decade ago.
Elsewhere in the Puget Sound region, the story was a bit more mixed.
Pierce County prices grew 15.9 percent, to a new median of about $313,000.
In Snohomish County, home values were up 9.8 percent to $450,000.
But in Kitsap County, home prices increased just 3.5 percent, hitting $300,000.
Prices in those three counties were still below record levels reached last year, reflecting a more normal seasonal slowdown.
The region as a whole has been the nation’s hottest housing market for 15 months in a row.
One potential wild card that brokers are keeping an eye on: mortgage interest rates. They have been historically low for a while but have just recently crept up to their highest point in four years nationally.
In Seattle, the average 30-year fixed rate on Monday was 4.16 percent, up from 3.8 percent a month prior, a level that had held for most of 2017, according to Zillow.
The difference might seem small, but it adds up: Someone buying the median Seattle house with a 20 percent down payment will have a monthly mortgage payment of $2,950 based on today’s interest rates. Based on the interest rate from last month, the monthly payment would have been $2,820.
Extrapolate that out over a 30-year mortgage, and the higher interest rate adds about $45,000 to the full purchase price of the typical home.