Seattle Home Price Forecast for 2015: Smaller Gains Ahead?
Home prices in the Seattle metro area rose steadily in 2014. According to a leading indicator, house values climbed more than 6% over the last year.
But you probably shouldn’t expect that kind of appreciation over the next 12 months. Housing economists have forecast that Seattle home prices would rise by about 4.5% to 5% over the next year. That’s a decent level of appreciation, but it’s less than last year.
Here’s a roundup of home price trends and forecasts for the Seattle area.
Forecast: Seattle Home Prices Could Rise by 4.9% in 2015 and 2016
Home prices in and around Seattle rose by 6.3% over the last 12 months, according to Zillow.com This is based on the company’s proprietary method for measuring and tracking house values.
This number closely matches the one-year price trend shown in the most recent S&P/Case-Shiller Home Price Index. According to this closely watched index, house values in Seattle rose by 6.6% last year.
In March 2015, a team of economists at Zillow.com offered a one-year forecast that suggests more modest price gains over the next 12 months. Their one-year forecast was that Seattle home prices would rise by another 4.9% through March 2016.
So here we have a forecast for additional, but slightly more modest, price gains over the course of the next 12 months.
In March, the median (or midpoint) price for homes sold in the Seattle area was $327,000. That means half of all properties sold went for more than $327,000, while the other half sold below that mark.
It’s a supply-and-demand story, as always. There is currently a lot of demand for homes in the Seattle area, but inventory has actually declined over the last year or so.
According to a recent report by Realtor.com, the total number of Seattle homes listed on the website dropped by around 13% over the last 12 months. During that same 12-month period, Realtor.com reported a 7% increase in the median list price for this metro area. When inventory drops during periods of steady or rising demand, prices tend to move north.
Job Market Is Putting People in a Position to Buy
Home prices in Seattle are also being bolstered by a strong job market. The unemployment rate for the Seattle-Bellevue-Everett statistical area is currently hovering in the mid 4% range. That’s better than both the statewide and national jobless rates. In the wake of the U.S. housing crisis and recession, Seattle’s unemployment rate skyrocketed to nearly 10%. It has improved quite a bit since then. This puts more people in a position to buy a home, thereby increasing demand for housing. It certainly doesn’t hurt that 30-year mortgage rates are hovering below 4% either.
So the consensus, it seems, is that home prices in Seattle will likely continue to rise through the end of 2015. But future gains will probably be more modest when compared to last year.
Disclaimer: This article contains home price forecasts for the Seattle metro area. Forecasts and projections were provided by third parties not affiliated with our company. They do not necessarily reflect the views of the publisher.