Seattle home prices continue to soar at record-breaking pace

By Heidi Groover / The Seattle Times

SEATTLE —Even as the Seattle-area housing market started to cool this summer, prices shot up at the third-fastest rate in the country.

Home prices in the region leapt 25% in June compared to a year earlier, according to the S&P CoreLogic Case-Shiller Home Price Index released Tuesday. June was the fifth month in a row that prices climbed faster in only two other cities: Phoenix at 29.3% and San Diego at 27.1%.

The index, which tracks 20 major cities, lags by two months and measures price growth in portions of King, Pierce and Snohomish counties as part of the Seattle area.

Seattle’s price growth set a new record for the third month in a row, blowing past the 18% year-over-year growth the region saw in 2005, before the housing crash.

This year, pricey cities in the West are far from the only places where the cost of living is shooting up. Nationally, home prices were up nearly 19% compared to a year earlier, the highest jump in more than 30 years of index data, according to S&P Managing Director Craig Lazzara.

Prices climbed by double-digit percentages in all 20 major cities the index tracks. In 19 of those cities, single-family home prices are at all-time highs, Lazzara said.

For more than a year, the combination of hungry buyers, low interest rates and rock-bottom numbers of homes for sale has driven home prices up — and up. With some buyers freed by remote work and looking for more space, suburbs and smaller cities have boomed.

Here in the Puget Sound area, prices spiked outside the city, particularly on the Eastside and to the north in areas like Snohomish and Lake Stevens.

Even so, local real-estate agents described early signs of a cooldown in June, with some buyers taking a summer break and the number of competing offers dropping slightly. The Case-Shiller index shows a similar trend: While Seattle-area prices jumped about 5% from February to March, that monthly rate has been declining since. From May to June, prices increased 1.5%, according to the index.

That doesn’t mean homes are any more affordable, particularly for first-time buyers without a stockpile of cash. Last month, the median single-family home in King County sold for $871,000, according to separate data from the Northwest Multiple Listing Service.

Nationally, more houses are hitting listing sites, easing the tight market slightly, economists say.

“All told, home price growth remains sky high, but more signals are appearing that the housing market is slowly coming back to earth,” Zillow economist Matthew Speakman said in a statement Tuesday.

Relief may be slow to reach home shoppers.

“While the housing market feels like it has legs that never get tired, inventory and affordability constraints are still expected to put a damper on price growth,” said CoreLogic Deputy Chief Economist Selma Hepp in a statement.

“Less competition and more for-sale homes suggest we may be seeing the peak of home price acceleration,” Hepp said. “Going forward, home price growth may ease off but stay in the double digits through year end.”