Seattle’s 21-month run as the nation’s hottest housing market is over.
Las Vegas topped the Case Shiller U.S. National Home Price Index this month, with prices rising 13 percent over a year ago. Seattle has not fallen completely off the map, however, coming in second with annual price growth of 12.8 percent, followed by San Francisco at 10.7 percent.
Seattle has enjoyed and dealt with a long tech boom, powering tens of thousands of new jobs each year and supercharging the real estate market that struggled to keep up with demand. But in the last few months cracks have begun to appear. Case Shiller’s reports lag a little — this month’s report uses June numbers — so it will be interesting to see where Seattle’s numbers end up in the next few months.
Glenn Kelman, CEO of Redfin, is in a unique position to spot these trends as not only the head of a tech company but also a real estate brokerage with wealths of data on the housing market. Buyers in cities dealing with the positives and negatives of tech booms, such as Seattle and San Francisco, are sitting out, he said, frustrated by skyrocketing home prices and intense competition.
“In Seattle, Portland and San Jose where prices have increased the most, the percentage of homes selling in the first two weeks on the market declined in June from 61 percent to 52 percent,” Kelman said on a recent call with investors. “As U.S. home prices have increased faster than wages for 70 straight months, buyers in markets like these have finally had enough, at least for now.”
Kelman’s assertions are backed up by a recent report from cross-town real estate giant Zillow. Seattle is among U.S. cities showing the greatest slowdown in home value appreciation over the past year. It’s relative, of course, since values are still rising — but not at the blistering pace set in 2017.
The purported slowdown, as well as Seattle abdication of the title of the nation’s hottest housing market comes as the city’s biggest employer has somewhat slowed its dizzying pace of growth.
Amazon reported its first decline in headcount in nine years during the first quarter of this year, when its overall figure dropped by 2,900 employees. During an earnings call in July, the tech giant said it was slowing external hiring in favor of shuffling employees internally.