SEATTLE – Seattle’s housing market started the new year with a milestone: Housing prices here have been growing at the second-fastest rate in the nation for a full year.
For the 12th month in a row, only Phoenix outpaced the Seattle area for year-over-year home price growth in January, according to the S&P CoreLogic Case-Shiller Home Price Index released Tuesday. The index measures price growth in 20 metro areas, reports a three-month rolling average of home prices and lags by two months. The data reflects prices across the Seattle metro area, including parts of King, Pierce and Snohomish counties.
Seattle-area home prices were up 14.3 percent in January, compared to a year earlier. That was slightly slower than growth in Phoenix, where prices jumped 15.8 percent, and just barely faster than San Diego, where prices were up 14.2 percent.
Prices in the Seattle area are soaring faster than the national average. Still, national growth is in the double digits, up 11.2 percent in January from a year earlier.
Seattle prices zoomed up faster at the start of this year than at the peak of 2018’s brutal spring housing market, when prices were up 13.5 percent in May 2018 compared to the previous year, according to the index.
The index continues to show that prices are rising most steeply on the most affordable homes in the Puget Sound region. The cost for homes under $496,165, the least expensive one-third, was up roughly 17 percent year-over-year in January compared to about 13 percent for the top third, homes over $741,250.
Across King, Pierce and Snohomish counties, Pierce County continues to see the most dramatic price hikes, according to January data from Zillow. Prices were up 19.2 percent in Parkland compared to last year, 17.5 percent in Tacoma and 16.9 percent in Spanaway.
Pricier areas like Seattle and Mercer Island saw slower growth. The cost of homes was up 8.7 percent in Seattle and 7.2 percent in Mercer Island, according to Zillow. Other outlying towns, like Bothell, Kent and Lynnwood, were in the middle of the pack, with prices up about 13 percent.
In a statement, Zillow senior economist Jeff Tucker described a “collision between robust demand and rock-bottom inventory” driving prices up.
Across the country, the increasingly unaffordable market “will discourage some potential homebuyers from entering the market,” said CoreLogic Deputy Chief Economist Selma Hepp in a statement.