Home prices nationwide were up 14.2% year-over-year in October. One of the last great products for us investors! 1,227 homes went pending in Seattle. And while I think we have done a good job of minimizing substantial downturns in the ecomony we have not been able to eliminate all downturns. 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. See top home trends in Seattle. But, my oh my, talk about a strong rental mkt. Seattle Washington Residential Rent and Rental Statistics. 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? Let’s look at the three “steps” from 1968 to 1997. 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. Prices for Housing, 1967-2020 ($100,000) According to the U.S. Bureau of Labor Statistics, prices for housing were 781.11% higher in 2020 versus 1967 (a $781,112.10 difference in value).. Many homes … If banks are seeing inflationary futures, they will increase mortgage rates if the Fed cuts their rates. 1. Sniglet, you bring up a good point. (1993-2007 Home Prices: NWMLS) Historical Time Series. Thanks. But suppose prices have stopped rising. When I left LA in June, there was little belief that prices could drop significantly because of many of the same reasons you listed: land restrictions, the strength of h-tech and entertainment, both of which feed into the global economy, yet… asking prices have come down 14.5% since then, meaning prices have dropped $110,000. The only way to increase our economic expansion is to increase this debt even furthe- r because we certainly don’t have the salaries to back it up. Seattle Housing Market Information. During the housing bubble of 2006 the ratio reached 4.5 - in other words, the median price for a single family home in the United States cost 4.5 times the US median annual household income. I am sure many people put down less than 20% so it will require even less time. 4. The ensuing discussion seems like more of the usual for this thread, but a few comments, like. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse. 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. There are thousands of abandoned homes across the country with weeds in the front yard that are still on the banks books at 2006 values. 6.25 on a 30 year par.? 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. In fact, the national median home price has not declined since the Great Depression of the 1930s. Jump: Fall ’76 to Spring ’79 – 71% in 2.5 years So far, my predictions seem to be right on track. It’s amazing that the runup actually beat the rate of inflation back then. 2) Weakness in the housing market has little to do with “sub-prime” or “resets”. 5. 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. The whole key to the “stair step” theory of house price inflation is based on supply and demand. Most of the foreclosure activity will take place this year and possibly into next year because the people who bought homes they never should have qualified for in the first place are not able to keep up with their payments indefinitely and they are forced to sell or lose their homes at auction. Price Data: Seattle Times) Steady Appreciation | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area. Its going to be a long bumpy road the years ahead. And we’re just beginning this process. When you can get a 5.25% 30-year fixed loan, you could afford to buy a much more expensive house with a given level of income than you could with a 6.5% loan. In comparison 5 years ago the average sales price was $354,572. Most of the sub-prime mortgages have now reset. Between 1967 and 2020: Housing experienced an average inflation rate of 4.19% per year.This rate of change indicates significant inflation. During this period the excess housing inventory is wrung out of the market until eventually the supply-demand curves tips into the seller’s favor and we are off to the races again with another housing boom. An increase of a percentage point or two over the next several years could definitely accelerate downward momentum and severity of a decline. Very impressive. Homes have gotten significantly larger and nicer since 1992. It’s larger and has been tricked out, but those numbers just don’t comport with reality. In Seattle, WA, homes are currently listed at a median price of $661,725 and sold for a median price of $501,989. What a mess!! Home prices in Washington accelerated quickly from 2002 through 2007. Today, China and Germany export more than us. 1,653 new listings went on the market this month. As you can see in the Seattle housing market homes in the 350-1 million price range are the most commonly listed and sold. It is the biggest jump in house prices since April of 2018. In 1940, the median home price in the U.S. was less than $3,000. I call it a “stair step” pattern. Thanks very much! But as many of you have already observed, past performance does not predict the future. Alt-A’s will continue to reset until the end of 2009. I, too, would like to see income/afford ability data overlaid. Thanks for giving me credit for the “stair step” explanation of home price appreciation in the Puget Sound region. Read the article above – this is where I’m putting my money. Historical Median Home Value. and A.G., Before-Grunge and After-Grunge. Don’t bother citing Tim’s employment study because it is majorly flawed. Today with more risky loans it may only take a mild recession to put a significant number of people into foreclosure. 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. 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. Median prices in 2019 exceeded 2009 values by 58.9%. The nature of those relative to subprime loans is not clear nor is it clear the effets that new mortgage work-out rules will have. So a Case-Shiller value of 200 means house prices have doubled since January 2000. I am rambling now….bye. Most of the sub-prime mortgages have now reset. The following data are for new, single-family houses only. Nice post, but I think you need to check some of your “facts”: The median rent more accurately depicts rental rates in the middle of the distribution of rents and is thus preferred in the analysis below. But there are lots of reasons to think there will not be a 20+% bloodbath, like what has been seen in LV, Miami, etc. I’m not certain that the past is all that instructive either, Marc. Browse detailed statistics & rent trends, compare apartment sizes and rent prices by neighborhood. In Seattle, home prices began to climb steadily in 2012, following a drop that occurred during the nationwide housing collapse. This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Higher demand drives the price up. 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? Median Home Price: $420,500. That is down 31 from the previous month, up 314 from last year, and up 255 from 5 years ago. How much have fed rate cuts driven them down so far? Most of the weakness in the market will come from the 1000 sq ft boxes in drainage ditches on the south side. Step 1: Alan, I know that all too well–my family income (w/2 working parents) is in this range. $960,673,123 was the total closed sales volume for Snohomish County. Sales of Existing Single Family Homes (percent changes only) Median Prices of Existing Single Family Homes. Like the low rates of the 2003-2004 period, the emergence of subprime loans and loose “stated income” loans with zero down payment opened the housing market to many people who had been previously shut out. There Pretty amusing that the optomistic answer turned out to be correct and in all likelyhood so was the pessimistic answer. 125% of that is $543k. DJO, I’m not sure what you’re trying to say. Drop: Spring ’79 to Fall ’85 – -20% in 6.5 years We won’t know what the local median is until that is done. The sad fact is that over the last 8 years, the rich … Kim Malcolm talks with Seattle Times reporter Mike Rosenberg about why the Seattle area is leading the nation in home price decreases. Redfin Compete Score ™ 0. My money continues to travel to Nevada. I also think that interest rates will play a big role in how the graph shapes up from here on out. 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 median sale price was $756K. Studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer a more generous square footage. Will take YEARS to work off the overall inventory glut that is out there. This value is seasonally adjusted and only includes the middle price tier of homes. Round 2 of the real estate deflation hasn’t even hit yet. Great graph Tim… I would also like to see the interest rate along side. Unfortunately, I suspect there is a much higher correlation between the availability of credit and housing appreciation than there is between jobs or population growth. As we are seeing all across the US right now. Third, Fannie Mae and Freddie Mac will do what their told by congress. 1,259 homes were sold in Seattle last month. This would cause price increase so I don’t think we can expect an extended period on no growth similar to 1945-1970. When a home-owner without equity runs into any trouble, they can’t just sell or re-finance, and the only option is foreclosure. Personally I think that’s a lot more likely. $845,500 +16.5% year-over-year. 6. drive home the fact that the esteemed readership of Seattle Bubble really are looking at the issues from a peculiar, privileged perch. Buyers used this new found buying power to run out and bid up home prices to previously unaffordable levels — because with low interest rates they were now “affordable.”. Notify me of follow-up comments by email. In October 2020, the median list price of homes in Seattle, WA was $735K, trending up 5.1% year-over-year. Mortgage rates hit a 40-year low in 2003. Our banks sold us on toxic levels of debt that our grandparents would never go anywhere near. 1) There is NO correlation between job creation or population growth and housing prices. I can’t remember exactly. Zillow has 1,973 homes for sale in Seattle WA. As you know from our previous conversations, my real estate research only goes back to the 1960’s and like you, I agree that is the beginning of the “modern” housing market in this area. | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area. The median home price in California has reached its highest level since 2007, coming in at $522,440 for February 2018 (data compiled by the California Association of Realtors – CAR. Great chart. And when those go down by 40%, you don’t think that’ll impact 1500 sq ft boxes in Bellevue and West Seattle? – “Conforming Jumbos” won’t help much if at all. IMHO, I strongly suspect that the previous peaks and valleys have very little predictive value. Rent Prices in Canadian Cities. Also, if someone is not in the home buying class, it means they’re renting. Also, did you post the affordability graph that you mentioned in February? I am sure many people put down less than 20% so it will require even less time”. Every time you see the spikes, look back to the historical context of federal monetary engineering. I discussed the “steps” mainly to explore whether Steve Tytler’s theory holds any water, and if so, what would it mean going forward. But “temporary” irrational deviations sure can last longer than we think they should. I definitely smell blood and will continue to scoop GEMS where I see them. What happened after 1992? 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. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to … This generally will affect the lowest end of the real estate market. However, homes in the 500k-1m price range sold the fastest. We could easily correct for this extra-long run-up by having just 3-5 years of price declines in the 5-15% range, sparing us the 35-year stagnation. I agree with Lionel and Software engineer. What happened in the 1970-1985 period? PDF versions will no longer be produced. $747,000 +6.9% year-over-year. )That’s an 8.8% increase, year to year, from February 2017, when the median home price in the state was $480,270. 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. This will effectively lower interest rates. Most Competitive. #33: Folks; we are all one board meeting away from loosing our jobs. This graph depicts the average ticket price for Seattle Seahawks games in the National Football League from 2006 to 2019. Angie, I’m in that “lower level”, so I’m certainly not looking at the world from a lofty perch. This will effectively lower interest rates. This is the best graphic illustration of my “theory” that I have seen to date. I would also like to see the graph with logarihmic axis for house prices. For the past 6 to 7 years an extreme drop in inventory led to an astronomical rise in Seattle home prices, as buyers competed over a dwindling number of properties on the market. How much more cheap crap can we buy?? Median incomes keep getting used here, but little attention has been paid to the median incomes of the HOME BUYING CLASS. 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. Americans are in a historic amount of debt; and our economy is over 65% consumption!!!!! With the average cost of a home in San Francisco hovering at $1.61 million, a typical 30-year mortgage—with a 20 percent down payment at today’s 4.55 percent interest rate—would require a monthly payment of $7,900 (more than double the $3,333 median monthly rent for a one-bedroom apartment last year). It might be better to use a logarithmic axis for the raw price. 1 year 3 years 5 years. Interesting the concept that “the market will never go down” given the span of 2006-2009. Good stuff Tim. The inflation measurements are starting to reflect the rate cuts earlier this year.