Seattle has always been an alluring housing market. Big companies such as Boeing and tech startups including Microsoft and Amazon have helped the city and its surrounding areas gain momentum and become hot spots for real estate, even during nationwide crises.
[Related: Guide to Buying a Home in Seattle]
Seattle Housing Market From 1985-2006
As far back as 1985, Seattle has had consistent year-over-year housing price increases, only encountering a hiccup during the 2007 housing crisis. This chart published by the Seattle Times on September 3, 2006 shows the climbing median single-family home prices in King County, ranging from $79,950 in 1985 to $410,000 in 2006.
The Seattle Times notes the significant employment growth led by Boeing, the international trade boom, and strong population growth as causes for rapid home-buying in the late ‘80s into 1990.
A national recession began in 1991 that caused local home demand to drop, population growth to stall, and employment to stagnate. This leveling out began once more to increase in the late ‘90s as tech startups and stock market gains led to more employment and local home purchases.
Seattle again experienced a recession in the early 2000s as Boeing cut more than 30,000 jobs, but with mortgage rates the lowest they had been in 40 years, the market remained relatively hot. This chart ends during the mid-2000s, when Seattle saw huge increases in local job opportunities, and home demand overtook inventory, causing prices to rapidly increase.
The Great Recession and Housing Collapse of 2007-2009
In the mid-2000s, the United States went through an economic collapse, causing the housing market to plummet.
The Federal Reserve raised the federal funds rate and mortgage rates skyrocketed. Those with adjustable-rate mortgages couldn’t afford higher payments and so housing demand and home prices plummeted. The value of derivatives banks used for hedge-fund trading crumbled, and banks stopped lending to each other. This caused the “Great Recession” from 2007 to 2009.
Home prices across the nation dropped by 33% on average, but Seattle came out strong. Since the recession, Seattle has seen an overall 27.8% growth, and a whopping 91.4% growth from the city’s lowest recession dip.
[Related: The Complete Guide to Moving to Seattle]
Seattle Housing Market from 2010-2019
Over the past decade, housing prices across the nation have increased on average by almost 45%. Seattle is one of the most successful cities when it comes to recovering from the recession and seeing rising property values — home prices have increased by over 50% since 2010.
Since home values have increased, homeowners in the Seattle area have plenty of equity because of appreciation rates. For example: a home purchased in 2010 for $200,000 is now worth over double, at around $412,000 based on the rising pace of Seattle home values in the past 10 years.
Although this is great for those looking to sell, the median family income in the Seattle metro area has only risen around 20% since 2010, which means this price appreciation is outpacing income. This could be why many “millennials” aren’t buying homes in King County, whereas many individuals of their parents’ generation (“boomers”) purchased homes between the ages of 20 and 30.
[Related: Important Tips for Millennial Homebuyers]
The Seattle housing market continued to rise post-recession until 2019, when home prices dropped by 3.4% and supply increased over 100%, tipping the market in the buyer’s favor for the first time in a long time.
The Impact of the 2020 Pandemic
At the beginning of 2020, as the nation scrambled to understand the impact of the COVID-19 global pandemic, the housing market was impacted as well.
Supply and demand fell as sellers took their homes off the market and potential homebuyers postponed home searching in order to shelter-in-place and focus on the health of themselves and their families. Construction on new homes decreased — building permits for single family homes dropped 24% from March 2020 to April. Unemployment rates also spiked, with over 30 million people losing their jobs as reported by the U.S. Department of Labor.
Since both supply and demand fell at the same time, median home prices didn’t see as much of a drastic change as one might expect. Median home prices in King County dropped from $720,400 in March of 2020 to $715,00 in April, and closed sales dropped by almost 25% in an April year-over-year comparison.
The Seattle Housing Market Now
Slowly, the housing market began to recover, and Seattle has come out stronger than ever. From the start to the end of 2020, housing prices in the Seattle metro area increased by over 10%, and are predicted to continue at the same pace through this year.
In January 2021, Seattle’s median price was reported as $745,500, up 11.27% from January 2020’s median home price of $670,000.
Housing supply and inventory are still low compared to demand. In January of 2021, King County had 12.42% fewer active listings than in January of 2020. Sellers are having no issue finding interest in their for-sale properties, and the market is very much in their favor.
Zillow predicts a boom in the real estate market of surrounding counties as well. Because of the rise of remote work, we could see more homebuyers looking toward the suburbs in places like Snohomish County, Tacoma, or Federal Way.
[Related: The Best Times To Buy a Home in Seattle]
Contact Seattle Mortgage Planners Today
Seattle Mortgage Planners knows that your journey as a potential or current homeowner can be seriously impacted by the current housing market both locally and nationally.
We’re ready to help you on your home-buying journey, whether that means assisting you through the loan process, finding the best mortgage rates, or even comparing Seattle neighborhoods. Our experienced mortgage planners will provide the right information and guidance tailored to your specific situation and goals.
Schedule a call today to get started.