Home prices shot up over the summer; Seattle still No. 2 in nation for growth

Home prices around the country continued to shoot up as summer drew to a close — and the Seattle area was no exception.

Prices around Seattle rose year-over-year by 8.5% in August, the second-highest rate of growth in the country after Phoenix, which clocked a 9.9% increase, according to the S&P CoreLogic Case-Shiller Home Price Index released Tuesday morning.

August was the seventh consecutive month that Seattle was second to Phoenix in average home price growth, and the 10th straight month that Seattle price growth topped national averages. Nationally, home prices rose an average 5.7% in August, compared to 4.8% the previous month.

By one measure, home prices nationwide are rising faster than they ever have — “an incredible feat considering the market is rising from an already elevated level,” said Zillow chief economist Matthew Speakman in a statement. Annual growth of single-family home prices has risen by more in the last three months than in any previously recorded period dating back to 1969, Zillow data shows.

That price growth rocketed the Case-Shiller index to a new peak, 21% above pre-Great Recession highs, according to CoreLogic Deputy Chief Economist Selma Hepp.

“A forgone spring home-buying season appears to have fully shifted into summer months, leading to sales volumes that are picking up speed at a time when they would normally show signs of slowing,” Hepp said. Demand, she said, was also fueled by “those motived by record-low mortgage rates, desire for a larger home or desire for a vacation home as a result of the pandemic.”

In line with the national trend, all 19 major cities that Case-Shiller tracks reported price acceleration in August compared to July; among those metros, prices rose 5.2% year-over year. (Typically, Case-Shiller examines home prices in 20 metro areas, but data for the Detroit metro area has been unavailable since the start of the pandemic.)

In the three-county Seattle area, the most affordable homes continue to see the most rapid price growth as downtown condo- and apartment-dwellers enter the home market in search of more space.

Prices rose nearly 12% year-over-year among the area’s most affordable homes, those priced under $461,032. Those houses tend to be concentrated in Pierce County, where the median home price hit a new all-time high of $434,999 last month.

More expensive homes, those selling for more than $690,248 — including most homes in King County, where a typical home now costs $753,600 — saw price growth of close to 8%. Homes priced between those two points charted price growth of nearly 10%.

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