After years as an oasis of affordability, Tacoma is rapidly losing its status as a refuge for homebuyers priced out of places like Seattle.
One big reason: those priced-out Seattle homebuyers.
According to a new report by Redfin, the Tacoma metro area has now overtaken Seattle as the hottest housing market in the country in several key measurements.
Among those metrics: 49.7% of homes sold in Tacoma in May went for more than the asking price, compared to 37.8% in Seattle and 23.8% nationally, according to a Redfin analysis of local data from the Multiple Listing Service.
The median home in Tacoma was on the market just eight days — the shortest period of any U.S. metro — while the supply of homes for sale is just 1.3 months, the lowest in the United States.
The median price for a Tacoma-area home in mid-May was up 6% from a year earlier, to $370,000. It’s not the biggest jump in the United States (that honor goes to Camden, N.J., which saw a 15.6% year-over-year jump in May). But Tacoma’s increase is still more than one-third above the national median increase, and more than twice that of metro Seattle, where May home prices increased just 2.6%, to $595,000, according to Redfin.
The Seattle comparison is apt, given that homebuyers fleeing Seattle and heading south are “a significant driver” for Tacoma’s hot market, says Daniel Murillo, housing division manager with the Tacoma Department of Community and Economic Development.
“When you have communities north of Tacoma that have a mix of higher incomes and higher housing costs, at some point, those individuals are priced out of that market and they just have to drive until they find a market that is affordable,” Murillo says.
“They’re just tired of the bidding wars,” adds Ellen Campion, a Redfin listing broker in Tacoma who says her Seattle clients were routinely losing out to tech-company employees able to offer $100,000 in cash above a home’s list price. In Tacoma, she says, “they can get way more house for the buck.”
Demand from Seattle buyers has been strong across the Tacoma market, Campion says, but it has been especially sharp for homes under $350, 000. “We can [list] at noon, have people touring by that afternoon and offers by 8 p.m.,” she says.
But those Tacoma bargains come at a cost. Unlike Seattle, where a hot housing market reflects an equally hot job market, Tacoma can’t offer newcomers quite the same employment prospects. That’s left many of the transplants commuting back to jobs in Seattle.
Ten years ago, that commute was already as much as an hour each way, says Jenn Adrien, spokesperson for the Tacoma Economic Development Board. Today, Adrien says, the trip can stretch to two hours each way — “time you can’t use to go to a parent-teacher conference or take your dog to the dog park,” Adrien says.
And those bargain hunters from Seattle have helped fuel a new affordability crisis.
In many cases, Seattleites’ buying power has been “displacing those with lower incomes who are in our community already,” says Murillo, adding that many of these longtime residents are now themselves being pushed south.
That domino effect hasn’t been entirely welcomed by Tacoma natives.
“There’s definitely a lot of resentment,” says Sarah, who preferred not to give her last name. The ceramic artist bought a home in Tacoma’s Lincoln district three years ago for around a third of what she and her partner would have paid in their old neighborhood of Columbia City — only to see home prices in their new city soar.
“We got in right before the big wave came from Seattle,” she says, acknowledging that it has been uncomfortable to have “found myself in this position where I got gentrified out of one city only to become a gentrifier the next day.”