Economist: Seattle’s slow housing market only a blip

house-620-ap

You may have heard that the big chill has suddenly hit the Seattle housing market. According to the Case-Shiller home-price index, Seattle home prices are falling faster than the rest of the country. The Emerald City was leading only a few months ago.

But we mustn’t read too much into it, says Chief Economist Matthew Gardner at Windermere Real Estate.

“In terms of overall house prices, in the last couple of months we’ve seen some significant softening,” Gardner told Seattle’s Morning News. “There are some out there that are projecting a bubble, a major correction in housing values — I don’t see it.”

According to the Case-Shiller home-price index, single-family home costs declined 1.3 percent in September, following a 1.6 percent drop the month before. What’s especially striking is how widespread the drop is; it extends from Pierce to King to Snohomish counties.

“We’ve certainly reached a peak with a lack of affordability. There must be a ratio between home prices and incomes — we’ve breached that, but it doesn’t mean that housing prices are going to correct in the downside,” he said. “Housing is not a stock. You shouldn’t look at it on its value day-to-day, month-to-month, or even year-to-year. It’s shelter, first, and an asset, second.”

Increasing supply of town homes, duplexes, triplexes, ADUs, and small cottages, could potentially mitigate the housing crisis says Gardner. He also believes we need to improve transit substantially and increase density around transit centers as means of making it easier for people to live somewhat near job centers, where Seattle home prices are normally higher.

Gardner says that part of the reason that prices have softened is that plenty more units are coming on the market and that people are trying to time the market. Invariably, when you get more supply, with a still reasonable demand, home price growth softens.

“I think a lot of those will trail off this month as they classically do in December. The big question is going to be is how many more units we see coming online in the spring market.”

~Kiro Radio Staff

Comments

  1. AVEDA Enlightener Blonding delivers greatest lift.

Speak Your Mind

*