Seattle remains nation’s hottest housing market for a full year as home prices rise more than 2x national rate

(GeekWire Photo / Kurt Schlosser)

There are almost as many stories of Seattle’s housing market shattering records as there are cranes dotting the city’s skyline. Today marks another milestone in the unending ascent of Seattle real estate: the region has defended its title as the nation’s hottest housing market for a full year.

That’s according to the latest Case-Shiller National Home Price Index numbers. Seattle home values in August 2017 rose 13.2 percent from August 2016. The region’s home prices grew more than double the national rate, of 6.1 percent.

No other metro region even broke 10 percent. Following Seattle is Las Vegas with a year-over-year increase of 8.6 percent, trailed by San Diego at 7.8 percent.

Seattle’s stats may be shocking but they’ll come as no shock to anyone who actually lives in the city. It is the fastest-growing big city in the country, adding 57 people a day, on average.

As the chart below demonstrates, Seattle has seen the biggest spike in low- and middle-tier home prices, meaning the red-hot housing market is acutely felt by anyone who isn’t earning a high salary.

This chart compares year-over-year returns for Seattle with different ranges of
housing prices (tiers). (Click to enlarge)

Combine that with the fact that many of the newcomers are drawn to the region by the lucrative job opportunities in Seattle’s booming tech industry and it’s not hard to understand some of the tension among the city’s different cohorts.

With so much competition for starter homes, it’s also a difficult market for first-time home buyers to enter, even the early-career techies working at Amazon and Microsoft. But developers are creating new housing inventory at record rates, which could account for home values rising more steadily than the massive spikes of 2013 and 2014.

“Home prices have reached new all-time highs,” David Blitzer, managing director of the Index Committee at S&P Dow Jones Indices said in a statement. “However, home prices will not rise forever. Measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking.”