Buying Puget Sound home harder ‘than any time in past 40 years’ as prices rise

Nov 13, 2020, 12:16 PM
(AP file photo)
(AP file photo)

The pandemic continues to make the Puget Sound housing market volatile, as prices rise and buyers struggle to keep up.

Seattle housing market sees ‘massive changes’ in pandemic landscape

“If you look at the whole of the Northwest (Multiple Listing Service) area that they cover, which is 24 counties, there were only three where price growth was in single digits, which is just quite extraordinary,” Windermere Chief Economist Matthew Gardner told KIRO Radio’s Dave Ross.

For October, that includes a 12.9% year-over-year increase for median residential home prices in King County, a 17.2% increase in Snohomish County, and a 17.8% increase in Pierce County. In more suburban and less populated counties, those prices have risen even more precipitously, increasing by 49% in Ferry County, 38.6% in Kittitas County, and 31.6% in Chelan County.

That in turn has led to difficulties for mid-level buyers, who are quickly finding themselves priced out.

“Finding and buying a home today is more difficult than at any time in the past 40 years of my career,” NWMLS broker Dick Beeson said in a news release.

Regionally, Gardner’s chief concern revolves around historically low inventory in the Central Puget Sound area.

“Keep in mind that a four month supply of homes for sale is a sign of a balanced housing market, but in 14 counties, including the King/Pierce/Snohomish region, there is currently less than one month of supply,” he noted. “This is what is allowing home prices to escalate at double digit rates.”

Housing market inventory at 20-year low for Puget Sound region

Digging into historical data to compare to 2020, Gardner couldn’t find a single month with inventory supply this low since 1999. That’s largely been the culprit behind rapidly rising home prices.

“We have to go back to good old Economics 101,” Gardner said in October. “When you have net new demand and you limit supply, what happens to prices? They rise, and that’s very much the case.”

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Buying Puget Sound home harder ‘than any time in past 40 years’ as prices rise