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Washington has long been a hot state in terms of housing, and prices have risen considerably over the years. But what will the outlook be for the housing market in Washington for 2023?
We’ve long known that New York and California are home to some of the most expensive housing markets in America. But new data suggests that Washington State is moving up the ranks as well, and at a fast pace.
In fact, a recent article in Business Insider revealed that Washington State is in the top 10 most expensive markets in the country.
According to data released by Zillow, home prices in Washington State rose by 23.2% compared to the same time last year, which is even faster than the very hot national rate of increase over the past year.
You’d have to go back a ways to find the last time Washington State topped this list. It happened during a three-month period at the end of 1989 and beginning of 1990.
Right now, the average home price in Washington State is $579,575.
We all know that Seattle’s housing market has been red-hot for years. But there are other markets nearby that are also hot right now, including Tacoma, which has seen a decrease in home values of 5.6% over the past year. The median price of homes in Tacoma is $479,537.
From Bellingham in the east to Spokane in the west, home prices in the state have risen over the past year. As a result of these trends, Washington has steadily climbed the list of most expensive states in the country for house values, and is now ranked within the top seven by some analysts.
Like the national housing market, Washington State’s real estate market is considered very hot right now and is expected to be for the next few months.
So what’s going on here? What is it about the Washington State housing market that’s causing home prices to skyrocket in such a manner? It’s a supply and demand story, as always.
Frank Nothaft, chief economist for real estate data provider CoreLogic, recently cited the state’s unique blend of urban and scenic outdoor activities as one of the big lures. Millennials, in particular, are drawn to what this area has to offer. And the state’s strong economy is equally attractive.
As a result of all this, housing demand has surged in recent years. But the state’s construction industry has been sluggish by comparison, and new-home construction hasn’t kept pace with demand.
Housing inventory is usually measured by the number of months worth of supply (homes for sale). Most economists consider a six-month supply to be a healthy and balanced housing market. But many cities across Washington State fall well below this level.
In King County, for instance, housing inventory is under 1-month supply right now. That’s quite a bit less than what a balanced market is supposed to look like in terms of inventory.
That said, inventory appears to be increasing, but because of such strong demand, the current supply cannot keep up.
So, the most populous areas of Washington State are all suffering from a shortage of home inventory. This comes at a time when housing demand is rising, due to population growth and economic improvements.
It’s Econ 101: Rising demand and limited supply puts upward pressure on prices.
Home prices in Washington State have risen steadily decreased over the past year — at least in most cities. And they are expected to continue decrease throughout 2023, though perhaps not at the same pace as the past 12 months.
As such, anyone looking to buy a home might want to jump in soon before prices continue to take off. Not only will that mean paying less, but it will also mean you will enjoy growth in home equity as the value of your home appreciates.
If buying a home in Washington State is on the agenda, call Sammamish Mortgage. Since 1992, Sammamish Mortgage has been helping borrowers get approved for various mortgage programs in Washington, Idaho, Colorado, California and Oregon, and we’d love to help you too. Get in touch with us today for an instant rate quote.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.