The median cost of a home in King County is still going up by double digits compared to last year’s prices.
Matthew Gardner, chief economist at Windermere Realty, says it’s not a housing bubble.
“I certainly don’t see a contraction of prices at all. Or even actually a flattening,” he said. “However, I do see home price growth drop back into the single to high-single digit range in 2017 and possibly into 2018 as well.”
The median home in King County sold for more than $500,000 in December, which is a 12 percent increase from 2015.
Neighboring counties are also seeing double-digit increases, partially because the number of homes for sale is going down.
A ‘less hot’ housing market
Gardner’s comment echoes what CEO of John L. Scott Real Estate told KIRO 7 at the end of 2016.
At the end of December, Lennox Scott said King, Kitsap, Pierce, and Snohomish are at least 10 percent more expensive than they were a year ago. However, he estimates that growth in 2017 may be between 8-9 percent overall.
“We’re just talking degrees of hotness. We’re just coming down one degree of hotness,” Scott said.
He said housing markets typically go in a 10-year cycle. He described the current phase as being the seventh year of a 10-year cycle.
Scott said two factors typically slow down a cycle: higher interest rates and slower job growth.
Both of those things are happening in 2017, but not to a significant level. Current job growth is more than 3 percent, and the Puget Sound Economic Forecaster predicts 2-3 percent in 2017.
While some scaling back may happen, the first few months of the year will still see a bidding frenzy.
“When buyers come out of the woodwork right after the first of the year, there aren’t a lot of new listings on the market. That doesn’t happen until the end of February or March,” Scott said.
KIRO 7 contributed to this story.