With Seattle now second to Vegas in home prices, is relief on the way?

Now that Seattle home prices have fallen to number two behind Las Vegas, there’s suddenly plenty of affordable housing, right?

“Oh of course. You just walk down the street and get a cheap house,” joked Mike Rosenberg of The Seattle Times to the Ron and Don Show. “We had been number one in home price increases for two years now, and now we’re number two behind Las Vegas.”

“Prices are still going up and things are still expensive, but it’s cooling down a little bit.”

For 21 months in a row Seattle led as the nation’s hottest housing market in the monthly Case-Shiller home price index. Of late, however, prices dropped as housing availability increased and sales slowed down, reports Rosenberg at the Seattle Times.

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Despite being dethroned by Las Vegas, prices are nonetheless rising. The question is: Will this ever change? It’s a difficult one to answer considering the numbers.

“The last few months prices have dropped from their spring highs. The number of homes for sale has shot back up to 2014 levels, and the number of people buying homes has fallen back down,” Rosenberg said.

“The question is if that’s going to continue, and if it does that will be an actual relief for buyers? But if it turns out to be a blip and goes back to being the way it was, then it won’t have much of an impact. I don’t think anyone knows for sure what’s going to happen with that.”

The long-term impact of relentless pricing increases on a city and community is massively transformative, often completely reshaping the cultural and demographic landscape.

“I think it has a huge effect. You’re looking at a situation where a lot of people are priced out,” Rosenberg said. “The cheapest homes in the outer stretches of the region are typically $500,000 to $600,000, so you would need a six-figure salary to afford that.”

“What you’re getting is a city of homeowners who either inherited it from their parents, or it’s people at the upper end of the income scale.”

Is there a drawback for Seattle homeowners?

While price increases may seems like a boon for homeowners, there are still drawbacks in addition to taxes.

“People say, ‘Well, why don’t you just cash out and sell your home for a lot more than what you paid for?’ But unless you’re downsizing or moving out of the region altogether, you sort of have to turn right back around and buy something for the similarly inflated prices,” Rosenberg said.

“That’s one of the biggest reasons over the last few years why the number of homes for sale has been at a historic low, despite the fact that you could make such high profits by selling your house.”