31. In 1980, it was $47,200, and by 2000, it had risen to $119,600. I agree 100%. Price Data: Seattle Times) The A.G. Seattle real estate market is a completely different animal than its P.G. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. But there are lots of reasons to think there will not be a 20+% bloodbath, like what has been seen in LV, Miami, etc. Seattle “median” is $435k. Real Estate prices in Seattle went up almost linearly [if you take a regression analysis average] from the time of Reagan’s deregulation of banks in 1990 to today’s 2008 subprime mess [caused by Reagan’s bank deregulation]. They rank a subpar #44 and #59 [even Japan is only #18]….can’t see from these pragmatic facts why we go to the east for savior labor in IT? IMHO, I strongly suspect that the previous peaks and valleys have very little predictive value. The Survey of Construction does not collect sales information for multifamily buildings or for existing homes. 125% of that is $543k. Probably not. Was the run-up in home prices due more to Seattle buyers having bigger INCOMES, or was it due to their having bigger LINES OF CREDIT? Because homes are a large investment, home prices are also used as a proxy for household wealth. The Census ACS 1-year survey reports that the median household income for the Seattle-Tacoma-Bellevue Washington metro area was $94,027 in 2019, the latest figures available.Seattle median household income is $15,340 higher than the median Washington household income and $28,315 greater than the US median household income. Foreclosures are mainly determined by the amount of equity home-owners have. 100. Median income has not changed much, but the median income of the home buying class has increased significantly. Tim, this blog is now officially better than anything I’ve seen in the Seattle media on real estate. I am sure many people put down less than 20% so it will require even less time”. SEATTLE - Home prices in the Seattle metro area fell last month, according to a new report released Monday. If this theory of mine is true, then a contraction in credit will negatively impact real-estate more than either job losses or population declines. That’s your new limit. FROM 1990 ON, BANK DEREGULATION (UNFETTERRED CAPITALISM) CAUSED THE ENDLESS REAL ESTATE BUBBLE TO TODAY’S SUBPRIME MESS. Median incomes keep getting used here, but little attention has been paid to the median incomes of the HOME BUYING CLASS. The most expensive Candian cities to rent in are Vancouver and Toronto, where rent for a one-bedroom apartment averages $1,850 and $2,230, respectively. The median monthly gross residential rent in Seattle, WA (the Seattle-Tacoma-Bellevue metro area) was $1,621 in 2019according to the Census ACSsurvey.1Average gross rent in Seattle was $1,609 in 2019. Americans are in a historic amount of debt; and our economy is over 65% consumption!!!!! While we keep spending billions in military might, the rest of the world is moving forward technologically. That’s your new limit. The price of houses in January 2000 is given the value of 100. I think we all know long term affordability has to be the primary determinant of price. – 2007 vintages of subprime are worse than previous vintages, so more defaults on less volume = about the same amount of problems. I saw the shamelessly promotional NAR tv ad this weekend that proclaimed that real estate values just about double every ten years and that we need to contact a realitor right away to get in on this bonanza. As such, I don’t think we can really gain any useful information from looking at home price patterns pre-1970. […] the best year to use as a baseline, since it was right at the peak of a good-sized run-up (see the 60-year Seattle home price graph), but it still gives us a good idea of where home prices would be if the appreciation curve had […], […] home price boom in the Seattle area is “unprecidented.” We have already explored the long-term home price trends in King County going back to 1946, but I thought it would be instructive to look at the data in a slightly different […]. 6. Pretty amusing that the optomistic answer turned out to be correct and in all likelyhood so was the pessimistic answer. The first thing that jumps out at me is how flat the graph is from 1946 through about 1969. Notice how the time frame with the sharpest rate of appreciation corresponds directly with the time frame in which loose lending was most prevalent. Median home prices keep getting used in analyses here, but I never see any attention paid to the structural improvements to the average Seattle home. Nice post, but I think you need to check some of your “facts”: and A.G., Before-Grunge and After-Grunge. What would be particularly interesting is to see how the use of various mortgage types for the Seattle region track over time as well. Very impressive. Median incomes keep getting used here, but little attention has been paid to the median incomes of the HOME BUYING CLASS. It might be better to use a logarithmic axis for the raw price. Seattle Housing Market Information. If you bought a house for $337,500 in 2012, it is now worth $651,000. This value is seasonally adjusted and only includes the middle price tier of homes. I, too, would like to see income/afford ability data overlaid. Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q3 2020 about median, sales, housing, and USA. Second, how do you know where regional boundaries will be set? The affordability index might shed some light on this… but I think there’s also something to be learned from looking at correlations (inverse correlations, I guess) between interest rates and home prices in Seattle, proper, since ’92. I agree with Sniglet that credit trumps all other factors in this most recent and unprecendented runup in the price of homes as shown on this chart. Personally I think that’s a lot more likely. in the 1970s the US dollar also went of the gold standard…. Unemployment Rate: 4.8% . In the book “The World is Flat”, the CEO of Infosys tells the writer “we are eating your lunch and you don’t even know it”. Our banks sold us on toxic levels of debt that our grandparents would never go anywhere near. Seattle Washington Residential Rent and Rental Statistics. The median home price on the Eastside just hit $880,000 and in Seattle the median home price is $722,000, according to the Northwest Multiple Listing Service. Regionally, prices were much higher. (1946-1992 Home Prices: Seattle Real Estate Research Report) I wanted to do the research to find out whether or not Mr. Tytler’s claims hold water, and to improve upon the Seattle Times graph, but with reliable home price data from the NWMLS only going back to 1993, I was in a bit of a jam. Can you imagine a Seattle ten years from now that has $900,000 – $1,000,000 median home prices on an average household income of $70,000 – $90,000 or do thousands of our neighbors losing their homes and going bankrupt seem like a more probable scenario. The typical sale price of an existing single-family home in 2017 was 4.2 times greater than the median household income, according to our latest State of the Nation’s Housing report.That’s a significant increase from 2011, when the price-to-income ratio was 3.3, and 1988, when it was 3.2. Average home value in Georgia: $208,833 Buyers no longer qualify. In October 2020, the median list price of homes in Seattle, WA was $735K, trending up 5.1% year-over-year. Lots of young engineers ready for experience, but you need to get a job in Seattle first to get experience. When a home-owner without equity runs into any trouble, they can’t just sell or re-finance, and the only option is foreclosure. Good stuff Tim. Looking at home price data this far back shows us a few interesting things. This is very useful information. If you controlled for factors, like land restrictions, home structure growth, income growth in the HOME BUYING CLASS, then you would see a much clearer relationship. As a result, prices went up at a historic pace, and there’s nothing to suggest they will stop anytime soon. While I suspect the economy will contract I doubt it will be similar to the ‘70s or ’80s. But, alas what are we at. In general home prices in the US are about three times annual household income levels. That caused the housing boom to go on longer than it normally would have because of the huge increase in demand. How much have fed rate cuts driven them down so far? $845,500 +16.5% year-over-year. 1-Year Job Growth Rate: 3.6%. I think it was in 1990 or 1992 when they quit making more land. The Central Puget Sound Real Estate Research Report (originally known as the Seattle Real Estate Research Report) has been publishing local housing market information every six months since 1946. – Based on data I have seen and shared, job growth has zero correlation with home price appreciation. When you have a high deman for housing — such as the one caused by lown mortgage rates — the inventory of homes for sale drops until it becomes a “Sellers Market.” It stays that way until the supply of homes for sale starts to get too big and/or demand from home buyers starts to decline. This house 2.5 years ago was 310k. So a Case-Shiller value of 200 means house prices have doubled since January 2000. 5. This recent run-up in Mtg rates will definitely slow the already testy mkt. )That’s an 8.8% increase, year to year, from February 2017, when the median home price in the state was $480,270. Folks; we are all one board meeting away from loosing our jobs. For yet another example of just how disconnected house prices here are from reality — I just signed a lease for a house in Bryant, a nice brick tudor for $1850. United States home values have gone up 6.6% over the past year and Zillow predicts they will rise 7.9% in the next year. Home prices in Washington accelerated quickly from 2002 through 2007. The significant down turns that were mentioned were associated with significant economic issues. Home prices increased in King County 16 percent between December 2016 and December 2017 to $585,000. Looks like the time to buy was 1975! I think this was fueled by a combination of low interest rates and loose lending policies. superimposed on the one above to see how they compare. If by the rest of world, you mean China and India, I don’t want to disappoint you, but those countries aren’t much better in technological innovation than Mexico. Third, Fannie Mae and Freddie Mac will do what their told by congress. Browse detailed statistics & rent trends, compare apartment sizes and rent prices by neighborhood. Personally I think we’re currently in uncharted waters as far as home prices go. Over the last three months, the price of a home in the Seattle area dropped by 3.3 percent, the largest decrease in the U.S.The median price of a house in Seattle is now $750,000. I’m not certain that the past is all that instructive either, Marc. Perhaps a higher percentage of home-owners may have been capable of withstanding job loss, or a recession, back in 1980 than today, if most borrowers had significant equity and traditional ARM or fixed loans. Bottom-Calling: Simple Mirror Forecast | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area. Median home price in Washington 1996 - 2019 Year Median 2019 $397,900 2018 $362,100 2017 $348,900 2016 $315,900 2015 $289,100 2014 $267,600 2013 $253,800 2012 $236,600 2011 $223,900 2010 $246,300 2009 $250,400 2008 $284,400 2007 $309,600 2006 $293,800 2005 $260,900 2004 $225,000 2003 $203,800 2002 $188,500 2001 $179,900 2000 $176,300 1999 $166,600 The median home price … In Hawaii—the state with the highest median home value of $619,000—the outstanding average mortgage amount was $345,963 or 44% lower than the estimated home value. Historical Median Home Value. I also think that interest rates will play a big role in how the graph shapes up from here on out. The S&P CoreLogic Case-Shiller 20-city home price index in the US rose 6.6% from a year earlier in September of 2020, following a 5.3% increase in the previous month and well above market expectations of a 5.1% gain. Seattle Housing Market Trends. If you want to buy a house this year, you may well be paying around $199,200, the median price for a home in the U.S., according to Zillow. DAYS ON MARKET. Just this week 2 loans on short sales that were waiting for final signatures from seller will be falling out of Escrow due to the recent bump in rates. All other factors being equal (which of course they aren’t), one could logically conclude that the upcoming period of dropping or flat prices will also last five times as long as previous steps, meaning we would be looking at 32-48 years of flat prices on the horizon. Interpretation. There is a LONG tradition of orders for new aircraft being cancelled when economies turn south, and tech is highly vulnerable to changes in IT and consumer spending. It is less biased than the mean (average) price since it is not as heavily influenced by small number of very highly priced homes. Seattle, Washington Home Price-to-Rent Ratios. But I think we all know that…. I’d tweak it a bit with pragmatic facts, check out the latest world rankings for IT and communications: http://arstechnica.com/news.ars/post/20070403-world-economic-forum-releases-annual-it-rankings-us-slides.html. Seattle’s economy diversified and grew at an unprecedented rate. I would also like to see the graph with logarihmic axis for house prices. In 2017, Seattle home prices hit a record high of $700,000 within the city limits in April and the median rent in the same area hit $2,000 per month. It makes sense on a cash flow basis for someone to buy, so you get a steady stream of new buyers. drive home the fact that the esteemed readership of Seattle Bubble really are looking at the issues from a peculiar, privileged perch. Case developed a method for comparing repeat sales of the same homes in an effort to study home pricing trends. The red line shows inflation-adjusted median single-family home prices (in 2007 dollars) from 1946 through 2007. Jump: Fall ’68 to Spring ’69 – 11% in 6 months The Survey of Construction does not collect sales information for multifamily buildings or for existing homes. Seattle’s economy will benefit disproportionately from strength in the non-US global economy. Graph and download economic data for Median Sales Price of Houses Sold for the United States (MSPUS) from Q1 1963 to Q3 2020 about median, sales, housing, and USA. Seattle’s economic well-being was highly dependent on a single company that was struggling. 3-Year Appreciation Rate: 21.6%. But, my oh my, talk about a strong rental mkt. I’m at a dead end after my fathers father. I have a suspicion that not only has property appreciated at a far higher rate in the last 15 years than ever before, but that far riskier types of mortgage products have been in use as well. I can’t remember exactly. Thanks for your honest opinion and reality in what is going on.I have owned homes in the past and it was simple and you worked for what you had.People changed and were looking for a jackpot in a short amount of time so with what is going on with the reality with over living and the motgage being due,life is changing for some people and you saw the change awhile ago and it is happening I think the same reality as a person who understands.Thanks for the reality bite of truth. See top home trends in Seattle. What a mess!! Stock market collapses, the OPEC oil crunch, economic recessions, and even wars have not negatively impacted national home prices since the 1930s. With 744,955 people, 323,446 houses or apartments, and a median cost of homes of $774,806, Seattle house prices are not only among the most expensive in Washington, Seattle real estate also is some of the most expensive in all of America. Their graph of local home prices going back to 1984 was interesting, but I was frustrated by two things. I have traveled the world for business during the 90s and in most Asian and Latin American projects, I was the only engineer representing a US company; everyone else was from Italy, Spain, Germany, Canada, Japan, Australia, etc. Notice that previous year-over-year price declines have never exceeded 5% for more than a year and a half. Interesting the concept that “the market will never go down” given the span of 2006-2009. Prices in the city have also doubled in the last five years, and have climbed $60,000 in the last year. Eventually the inventory of homes for sale gets bigger and bigger and the housing market becomes a “Buyers Market” which is where we are in the cycle today. Median home prices keep getting used in analyses here, but I never see any attention paid to the structural improvements to the average Seattle home. October and November were ugly. Catching up after a few days away: Tim, really nice job–thanks for the truly long-term perspective. Even though homes are relatively illiquid, their value can be tapped via home equity loans as happened with great frequency during the housing bubble. Thanks very much! Alan, I know that all too well–my family income (w/2 working parents) is in this range. Obviously it’s not linear, but when people at the bottom are losing their tails by selling, they can’t really afford to buy the next level up unless those prices also come down. So the idea of a flat-top at these price/rent ratios is just as absurd in Seattle as anywhere else. How much more cheap crap can we buy?? The trailing nominal prices are derived by taking the recent median price of existing single-family homes, as reported by the National Association of Realtors, and discounting it by the S&P/Case-Shiller Home Price Index. Tim Ellis is the founder of Seattle Bubble. 1) There is NO correlation between job creation or population growth and housing prices. There are examples of house price declines even while jobs and population were growing (Arizona in 2006, for example). Inslee's Safe Start proclamation: Coronavirus.wa.gov.