Seattle's price growth has outpaced that of the nation over the past five years. In fact, if you were to examine the past five years as a whole, Seattle home prices have grown nearly twice as quickly as national rates.
In December 2019, home prices rose by 3.8% year-over-year, up from 3.5% in November. Seattle closed out 2019 by capping eight years of increasing housing prices, which are currently 59% above what they were in 2012.
Many factors are contributing to this price growth. One of the main factors has been the COVID-19 (Coronavirus) global pandemic. This outbreak has affected the economy, consumer confidence, and the stock market.
Here's why mortgage rates have dropped as a result of coronavirus:
When investors start thinking the stock market is too risky—like right now—they sell their stocks and buy bonds. The higher the price of bonds, the lower the interest payment—called the yield—is relative to the price. When bond yields are lower, mortgage rates are lower, too. Low mortgage rates mean there is a surplus of people looking to buy. Combine that with a low supply of inventory and you get increased prices.
Another key factor is that the Seattle-area job market that continues to add new buyers, many of them well-paid. According to the U.S. Bureau of Labor Statistics, Seattle-area employment jumped 3.4% between December 2018 and December 2019, the second-largest increase in the nation.
Other cities across America have seen an acceleration in home prices as well, including the city with the strongest year-over-year growth: Phoenix, Arizona (at 6.5%). Close behind is Charlotte, NC (5.3%) and Tampa, Florida (5.2%).After a long stint of slow growth, It's not certain whether this recent acceleration of growth in Seattle is the end of deceleration, or if it is merely a pause in the grand scheme of things. Only time will tell!