SEATTLE HOUSING 2Q18: Rising Prices and Dwindling Lot Supply Push Growth Down
- Single family home sales are down 7% YoY, while the multifamily market is down 3% since 2Q17
- Growth is concentrated in Pierce county, which is the most affordable compared to King, Snohomish. 57% of the starts and 62% of the closings in Pierce County were priced between $250,000 and $450,000 compared to only 2% in King County.
- The average days on market while better than it was at this time last year month over month is seeing an increase. Homes in areas that had bidding wars 4 months ago are seeing just a few offers come in and some cases if not priced properly are sitting on the market.
Metrostudy’s 2Q18 survey of the Seattle housing market shows single family home sales finished the quarter down 7% from this time last year, while the multifamily market fell 3% for the region. Year to date comparisons of 2017 to 2018 put the region down 3.6% as a whole. Kitsap County fell the most at -32% followed by Thurston at -17% and Snohomish at -13%.
Pierce County led the region once again with gains of 22% due the affordability factor within the county. 57% of the starts and 62% of the closings in Pierce County were priced between $250,000 and $450,000 compared to only 2% in King County. The majority of starts in King County (47.1%) came in at $851,000 and up. Snohomish County had 30% of their starts fall in under $450,000, with 54% of their starts coming in between $451,000 and $750,000.
It’s officially the new peak of the market again for most of the market. King County continues its increase on the median closed price up now to $876,000 which is 70% above the previous peak of the market. The median closed price in Snohomish County climbed from $566,000 to $600,000. Pierce Counties median closed price rose to $490,000 compared to $465,000 in 2017 and Thurston Counties median closed price is now just over $400,000 for the first time in the 30 years we have been tracking new home sales.
“The 30 year Interest rate hit 4.44% at the end of the first quarter – close to 2013 highs – and 4.57% at the end of the second quarter and will continue to rise in the coming months if the economy stays strong,” said Todd Britsch, Regional Director of Metrostudy’s Seattle market. “It is evident that buyers are finding it harder to purchase in King County by the flood of buyers migrating South to Pierce County. Ironically the slowing of the housing market in the Puget Sound started with the Seattle City Council’s attempt to pass the head tax and while it was repealed they will continue to find a way to extract money from corporations or the tax payers to solve their inability to manage money and resources. The head was a shot across the bow for Seattle businesses and has eroded confidence in Seattle to be business friendly.”
The dwindling lot supply continues to be our biggest hurdle and there is no relief in sight. While 2017 saw the least amount of net lots extracted from the region the first half of 2018 now has a negative lot flow of 1,019 lots. Not surprising is that Pierce county took the biggest hit losing a net 742 lots year to date.
Months of resale supply is showing just a hint of increasing but nothing to write home about. King County has risen to a 1.6 month supply of resale housing from 1.3 months while the remainder of the Puget Sounds supply stayed relatively flat at an average of 2 months. Skagit County is the only county with more than 3 months supply at 3.7 months as of the end of June.
The average days on market while better than it was at this time last year month over month is seeing an increase. Homes in areas that had bidding wars 4 months ago are seeing just a few offers come in and some cases if not priced properly are sitting on the market. It will take up to 18 to 24 months for the resale market to be fully stabilized but we are on our way and to be honest it is needed. The Puget Sound still has the lowest level of resale inventory of any major market we track.
For information contact:
Todd Britsch – email@example.com
About Metrostudy: Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com
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