The Metrsotudy Analytics first-quarter market data for the Seattle-Tacoma-Bellevue, Washington market shows that the trendy city has experienced a slightly slow spring selling season with 14,099 closings reported thus far for 1Q14 market-wide. This represents nearly a 10% decrease in closings from 1Q13 and an even more significant drop, about 16.5% from the fourth-quarter. New-home closings for the first-quarter reached 1,445, which 260 fewer than 1Q13. For the city of Seattle alone, however, there is significant growth in new-home sales. The 34.4% jump in new-home closings for the city between 1Q13 and 1Q14 is among the largest increases in the nation from the first-quarter of last year.
Despite a minor drop in reported sales market-wide, new-home prices have continued to surge according to Metrostudy. The median closing price for the first-quarter hit $394,200, up from $328,000 a year ago. This 20.1% price increase s raises affordability concerns for the entry-level buyer in the new-home market, a common theme in many of the larger MSAs across the country. Existing home median price for the first-quarter reaches $284,000, which still shows an increase of more than $20,000 over the first-quarter of last year, but a median price jump 12% lower than for new homes. With significant price increases, Seattle is becoming one of the most expensive west coast markets. According to the Census Bureau, the preliminary new-home median sale price for the west was $324,400 in the fourth-quarter of 2013, approximately $67,000 less than the Seattle-Tacoma-Bellevue market. Seattle’s cost per square foot is also on the rise jumping to $202 from $164 in the last year.
According to the US Census, Seattle posted 1,974 single unit permits in March, down from 2,132 in March of last year. Median price increases coupled with a drop in permit count point to constrained supply and in more desirable locations and communities. Seattle continues to be one of the fastest growing cities in the country, ranked number six in the nation by Forbes earlier this year with a population growth rate of 1.2% in 2013. The Bureau of Labor Statistics reports the MSA’s unemployment rate is significantly lower than the national average (preliminary results show 4.8% in April) and is experiencing significant job growth at a rate of 2.6% according to Forbes.
The lingering questions for Seattle in 2014 are whether supply will keep up with demand in the growing city and what the impact of rapid price appreciation will be for those seeking new homes in the communities considered Seattle’s best.
Learn more about markets featured in this article: Seattle, WA.