For the second month in a row, Seattle is the only major American city where home prices were lower than a year ago.
Home prices in Seattle and the surrounding counties took a dip of 1.3% in June compared to last year, according to the latest data from the S&P CoreLogic Case-Shiller home-price index.
Nationally, home-price gains are slowing. Housing prices nationwide, while still posting a strong increase of 3.1% year-over-year, are growing half as quickly as they were this time last year, said Philip Murphy, managing director at S&P Dow Jones Indices, in a statement.
“While housing has clearly cooled off from 2018, home-price gains in most cities remain positive in low single digits,” Murphy said. “Therefore, it is likely that current rates of change will generally be sustained barring an economic downturn.”
West Coast housing markets are facing a particular slowdown, with Seattle, San Francisco and San Diego all posting lethargic numbers. High growth continues to be concentrated in the southwest and southeast, with Phoenix for the first time ousting Las Vegas as the city with the fastest-rising house prices. Tampa and Charlotte also posted strong gains.
The downturn reported by Case-Shiller, which tracks a three-month average of home-sale prices in King, Pierce and Snohomish counties, was driven by contraction in King County, where home values are on a months-long slide, according to market overviews from Zillow.
In the immediate Seattle area, July home values are down 4.3% since last year, to a median $714,400, Zillow data shows. That’s supported by Case-Shiller figures showing the prices of area homes over $628,000 — which includes most of the homes in the city — fell by 3% over last year.
Meanwhile, rambunctious markets in Pierce County and some parts of Snohomish County generated home-value gains of 6% and 1.1% compared with last summer, according to Zillow. (For the purpose of charting home-price trends, the Case-Shiller Index and Zillow Home Values Index are generally comparable.)
In Seattle, confidence in the housing market is waning, said Matt Van Winkle, the owner of RE/MAX Northwest.
“Listings that a year ago or two years ago would have been gold — say, a town house in Ballard — aren’t anymore,” Van Winkle said. Buyers, anticipating the market will continue to slow and prices will fall further, are practicing wait-and-see, he said.
That’s causing home sales to lollygag: Homes in the Seattle metro area are sitting on the market for close to a month, over 40% longer than this time last year, according to RE/MAX’s July Housing Report, a snapshot of current market conditions based on aggregated property listings.
While Seattle is still a seller’s market by traditional definitions, to many, the market feels molasses-like after the velocity at which homes moved in the past years. For 21 months between 2016 and 2018, Seattle home prices rose faster than anywhere else in the country, the second-longest streak since records began in 1987.
Two years ago, “if the buyer saw something on the market for more than 10 or 14 days, they would assume that something was wrong with the listing,” said Seattle RE/MAX agent Sarah Smith.
Now, she said, her listings in the heart of Green Lake, Windermere and Ballard “just don’t get the same initial activity. As a listing agent, you have to keep following up with people. Buyers are willing to demand more. They’re willing to expect a perfect listing.”
The housing market in Bellevue, too, has taken a hit, though not as hard as Seattle. Home values in the pricey Eastside suburb fell 3% since last year, to a median price of $903,900, according to Zillow.
Meanwhile, in some parts of Pierce and Thurston counties, where median home values are between $325-$350,000, prices are up as much as 10.7%, the Zillow data shows.
Closer to Seattle, too, there’s more activity in the lower-priced end of the spectrum. A federal index tracking the value of homes under $726,525 reported Tuesday modest price increases in the Seattle-Bellevue-Kent area. That index, compiled by the Federal Housing Finance Agency, showed prices of less expensive homes rising by 0.6% compared to last year.
But before sellers of those homes get too excited, the same index found that prices on those homes are rising faster in almost every other major city area than in Seattle: On a ranking of home price appreciation in 100 metropolitan areas, Seattle came in at number 99.