A spike in home costs in the metro area's least-expensive homes helped drive the increase this spring. However, the data is about two months old, and more recent reports have found a sudden surge in home listings have cooled the Seattle-area housing market.
Seattle-area home prices led the country again over the peak spring period and grew at their fastest rate since the 2006 bubble, spurred by a spike in home costs in the metro area’s least-expensive homes, according to a new report.
The median single-family home in the region cost 13.6 percent more in May than a year prior, according to the monthly Case-Shiller home price index, released Tuesday. Las Vegas was again second, with homes gaining 12.6 percent.
It was the 21st month in a row that the Seattle region led the nation in home price gains, the second longest streak since records began in 1987. Portland had topped the nation for 23 consecutive months in the early ’90s.
The last time home prices in the Seattle area rose this fast was during the housing bubble in the middle of last decade, when prices grew at an unsustainable rate of as much as 18 percent a year before crashing back down during the recession.
However, the surge doesn’t necessarily reflect what’s happening the market at this very moment.
The Case-Shiller data, while considered an important gauge nationally, is now about two months out of date. Since then, more up-to-date reports have shown a sudden spike in home listings that have cooled the market a bit, part of a broader national trend.
So what drove the uptick in the spring?
For most of the past few years, home prices here rose fairly evenly across various price points.
What you need to know
But in May, the data show the change was driven entirely by gains among the cheapest homes in the region – generally those on the outer edges of the metro area that stretches from Tacoma to Everett. Those homes are rising in value by about 18 percent, while the most expensive houses in the region – typically those in Seattle and the Eastside – saw price increases of about 12 percent, a rate unchanged from the past year or so.
Realtors have reported more and more people priced out of central King County moving north and south to find homes that are more affordable, which is pushing up prices in those outer areas.
The typical house now costs $813,000 in Seattle or $978,000 on the Eastside. Meanwhile, a median house will run you $511,000 in Snohomish County or $351,000 in Pierce County.
Compared to a month prior, home values across the region grew 2.2 percent, which was also the most in the country. Both the monthly and annual increases were double the national average.