While its sports teams, like those in every U.S. city, begin each season dreaming of a first-place finish, Seattle's rate of real estate appreciation has topped the national charts for more than a year and, based on the latest quarterly forecast from Veros Real Estate Solutions, will stay there for the next 12 months.
In the first column of this HousingWire article, I listed the ten U.S. metropolitan statistical areas with the highest projected appreciation between March 1, 2018 and March 1, 2019.
Number one on the list, with a projected rate of appreciation over 11%, was Washington State's Seattle-Tacoma-Bellevue metro area. It covers Seattle's King County, along with neighboring Pierce and Snohomish counties.
For a decade and a half, VeroFORECAST provided projections to help lenders anticipate risk and facilitate loan portfolio management. The recent March 2018 report is based on data from SFRs, condos and townhouses in 342 MSAs, and covers nearly a thousand counties and more than 13,600 ZIP codes. These markets contain approximately 82% of the nation's population.
The Seattle metro market's rise is no anomaly. The influx of new residents into Washington has been trending upwards for decades and we see appreciation rates up in counties all around Puget Sound.
In addition to Seattle-Tacoma-Bellevue, the Bellingham MSA, in Whatcom County to the north, is projected to be at 10.1% over the next year. That ranks second highest in the nation.
With three more Washington State markets within the top seven forecast to have the highest appreciation – Kennewick-Pasco-Richland in South Eastern Washington at 10%, Mount Vernon-Anacortes in Skagit County at 9.9% and Bremerton-Silverdale in Kitsap County at 9.5% – the region is experiencing an unmistakable surge.
The population in the greater Seattle metro area, with an average age of just 37, is over 3.7 million and continues to grow rapidly, up 22% in the last 15 years. While unemployment is 4.5%, a little higher than the national rate of 4.1%, the number of jobs within the MSA is more than 1.9 million, with the highest percentages in the industries of healthcare and social assistance, retail trade and professional, scientific, and tech services. Median household income, currently around $75,300, is growing at an average of 5.7% per year.
The Seattle market's remarkable strength is reflected in a supply of homes measured at a speedy one month of inventory.
The local media are cautiously celebrating the valuation increases. Seattle Times business reporter Mike Rosenberg declared March 2018 “the 17th month in a row that Seattle has led the country in home-price increases. That’s a record for Seattle and the longest streak for any metro area since San Francisco’s 20-month run that ended in 2001.”
According to a recent article by Windermere Real Estate Chief Economist Matthew Gardner, the high appreciation and low inventory figures within these counties are also reflected in dropping rates of home sales. Between fourth quarter 2016 and fourth quarter 2017, Bellingham's Whatcom County was off .2% and King County slowed by 1.1%, while home sales in Skagit County dropped 7.6%.
Gardner also adds, “Home prices in the Seattle area will continue to appreciate at above average rates through 2018 and into 2019. The region’s economy continues to flourish and job growth adds to demand for homes. New construction activity remains constrained and this puts further pressure on the resale market sending home values higher.”
