The Emerald City continues to dominate the S&P Case-Shiller home price index, as the latest report reveals that Seattle has maintained the highest home price growth in the U.S. for 14 consecutive months. And though it may seem as though Seattle’s growth won’t ever slow down, Seattle Times says “there are signs that a gradual cooling is starting to take place,” a pattern typical of the slowdowns seen in other cities that have topped the nation for long periods of time.
Looking at data from October 2017, single-family home prices in King, Snohomish and Pierce counties increased by 12.7 percent compared to last year, a figure that nearly doubles the U.S. average of 6.2 percent. This comes even as home prices dipped by 0.1 percent, though the figure rises to a 0.6 percent increase when seasonal changes are accounted for.
As the Times reports, Seattle’s 14-month achievement ties it for the second longest streak in any metro area in the nation since 2001: Phoenix topped the index for 14 months between 2005 and 2006, while San Francisco was crowned a 19-month reign in 1999 and 2001. Each ended with the “bubble bursting,” so what does that mean for Seattle? Though prior decades saw cities with skyrocketing home prices reset quickly, “that’s changed more recently as the hottest cities have begun to cool down only gradually.”
Looking at previous leaders from the last couple of years such as Denver, Portland, and San Francisco, a pattern emerges: each city saw slight drops of a few percentage points, rather than extreme drops in growth. As noted in the article, home price gains in Seattle have decreased slightly on a month-to-month basis since peaking at 13.5 percent earlier this fall, a sign that the market may be cooling. “Even if that pace of decline continues,” however, “Seattle would continue to see double-digit price increases for at least the first half of 2018.”