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A new Zillow ranking says the greater Seattle area is the third best large market in the country in which to buy a house this winter. This was unthinkable at the start of 2018, when the median sales
price of a single-family house in King County shot up nearly 20 percent annually. Now prices are up only about 8 percent, according to the Northwest Multiple Listing Service (NWMLS). Topping the Zillow list are Orlando and Boston. Following Seattle are Las Vegas; Charlotte, North Carolina; Columbus, Ohio; Portland; Sacramento; Minneapolis and Dallas. Seattle leads these markets with highest percentage (11.6 percent) of listings with price cuts. An increase in the share of listings with price cuts is one of three metrics Zillow used to compile its list. The other two are projected rent appreciation over the next year and affordability relative to the past. A key metric in all of this is rising mortgage interest rates. The most recent posted rate for a 30-year fixed mortgage was 4.85 percent, up nearly a full point from a year ago, according to Y Charts. Rates “will climb much further in 2019 and early 2020,” Zillow Senior Economist Aaron Terrazas said in a news release.
Higher rates diminish a homebuyer’s purchasing power, forcing some would-be buyers to stand down. Higher apartment demand leads to increased rents, and rising rents factor into when it’s a good time to buy. Zillow forecasts that Seattle apartment rents will increase 3.3 percent over the next year. Among the other 10 cities that top the best-places-to-buy list, only Portland will see a bigger jump, at 3.7 percent. In measuring housing affordability relative to the past, Zillow found that in Seattle, 28.6 percent of a median income went toward a mortgage in the second quarter. That figure was 24.6 percent a year earlier. The housing market always slows down in the fall, but Terrazas said this fall and winter are shaping up to be more favorable for buyers who have struggled to buy for several years amid red-hot competition. “Renters who were thinking of buying and decided to hold off may want to take another look this winter, as a steady clip of mortgage rate increases chips away at affordability and more homes become available on the market,” Terrazas said. In the Puget Sound region’s four-county metro area, inventory surged 37 percent annually in September, according to the NWMLS. The increases are much more pronounced in King and Snohomish counties than Kitsap and Pierce counties.
Marc Stiles
Staff Writer
Puget Sound Business Journal
