Seattle home prices still climbing at second-fastest rate in nation

Seattle-area home prices in the fall continued to climb at a faster rate than almost anywhere in the country.

In November, the year-over-year increase for Seattle-area homes was the second-highest in the country, behind only Phoenix, according to the S&P CoreLogic Case-Shiller Home Price Index released Tuesday. 

It was the 10th consecutive month of Seattle in the No. 2 spot.

The index reports a three-month rolling average of home prices. Seattle-area prices include homes in King, Pierce and Snohomish counties.

Seattle prices were up 12.7% from 2019, about 1 percentage point shy of Phoenix at 13.8%. San Diego, where home prices grew by the third-highest rate among major cities, saw a 12.3% increase. Seattle’s increase was up from the 11.7% jump in October.

Continuing a trend throughout 2020, Seattle-area prices shot up faster than the national average.

Nationally, prices rose 9.5% in November compared to a year earlier. That was a steeper increase than 8.4% the previous month.

That national growth was the highest since February 2014, CoreLogic economist Selma Hepp said in a statement.

As prices rise, even the most affordable homes can stretch out of reach for some buyers. 

In the Seattle area, the price of houses costing less than about $485,200 rose at a faster rate than more expensive homes. Those costing more than $726,600 grew at the slowest rate, about 12% compared to nearly 15% for the most affordable homes.

All 19 cities Case-Shiller tracks saw prices rise. (The index usually reports on 20 areas but does not have up-to-date data for Detroit because of the pandemic.)

The November numbers solidified a trend that emerged around the country after the coronavirus hit in the spring.

Price growth slowed in May and June. But throughout the rest of the summer and into the fall, growth in prices sped up again, according to the Index. 

Economists and brokers say low interest rates drove would-be buyers to make the leap throughout 2020. 

In Western Washington, the number of closed sales in 2020 was up from the previous year. Affordable areas like Pierce County saw some of the steepest price hikes.

The increase in office employees working from home appears to have been “a net positive for interest in Seattle-area housing since it remains a relatively affordable destination for house hunters from California,” said Zillow economist Jeff Tucker in a statement. “And now more of the region looks appealing to workers who may only rarely need to brave the commute to downtown headquarters.”

Some homebuyers left urban apartments for suburban homes, said Craig Lazzara, managing director at S&P Dow Jones Indices, in a statement. But more data is needed to know whether that is “a true secular shift in housing demand” or simply “an acceleration of moves that would have taken place over the next several years anyway,” he said.

Prices could continue to rise. 

“Given that we are unsure of when social interaction will be safe again,” Hepp said, “homebuyers will continue to compete for fewer and fewer homes available for sale, which will drive home prices higher.”