Thursday, February 2, 2023
Feb. 2, 2023

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Seattle’s housing market among fastest-cooling in U.S.

Aug.-Sept. price drop of 3% biggest dip in country

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SEATTLE — Not so long ago, Seattle spent months as one of the hottest housing markets in the country. Prices here were climbing faster than most other cities in the United States, often second only to Phoenix.

Times have changed.

Today, Seattle is among the fastest-cooling housing markets. Seattle-area prices declined about 3 percent from August to September, the biggest monthly dip in the country, tied with San Francisco, according to the latest S&P CoreLogic Case-Shiller Index.

Compared to a year ago, Seattle-area home prices were up about 6 percent in September, the second smallest annual price increase among 20 cities the index tracks. Only San Francisco saw more sluggish growth at about 2 percent.

Miami, Tampa and Charlotte topped the list for the largest year-over-year price gains, ranging from 18 percent to 25 percent.

Although home prices are still up year-over-year, the slowing pace of growth reflects the dramatic shift underway in expensive markets like Seattle. In September last year, Seattle-area prices were up 23 percent from the previous year.

Rising interest rates have driven up the cost of borrowing to buy a home, sidelining many buyers. With fewer buyers competing for homes, prices are leveling off or dropping across the country. Lagging tech stocks compound that situation in cities such as Seattle and San Francisco, where tech workers often tap into their stock options to buy a house.

Even as the market cools, Seattle homes are far from affordable. The median King County home sold for $903,000 in October, according to the Northwest Multiple Listing Service. The monthly mortgage payment for a typical home in the metro area, with a 20 percent down payment, topped $4,000 a month in October, according to Zillow.

Case-Shiller lags by two months, so the latest index data is from September. The index tracks three-month averages of single-family home sales. Its measure of the Seattle area includes portions of King, Snohomish and Pierce counties.

Case-Shiller reports that national home prices dipped 1 percent from August to September and were up nearly 11 percent over last year.

Home prices declined in all 20 cities the index tracks from August to September, and the trend is likely to continue.

“Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken,” S&P Managing Director Craig Lazzara said in a statement.

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