According to the latest S&P CoreLogic Case-Shiller index, Seattle has been knocked out of the top three cities for fastest growth in home prices by Phoenix who joins Las Vegas and San Francisco at the top of the list. Seattle also notched the fastest month-over-month decline in October — 1.1%. Only seven other cities saw median home prices drop month to month, and none of those fell more than 0.4%.
The Seattle metro area’s year-over-year increase was 7.3 percent through October. But in recent months Seattle prices have actually dropped: 11 percent over six months through November, according to sales data from the Northwest Multiple Listing Service. That reversal again made Seattle the market with the fastest month-over-month decline in October — 1.1 percent. Only seven other cities saw median home prices drop month to month, and none of those fell more than 0.4 percent.
Home prices nationally have eased in many markets during recent months as would-be buyers are struggling to afford homes. Prices have consistently climbed faster than wages, a challenge that was overcome until last year by historically low mortgage rates. But borrowing costs began to rise last year after President Donald Trump cut taxes by increasing the budget deficit and the Federal Reserve hiked interest rates.
“Prospective homebuyers can no longer sustain the demand that propped up aggressively rising home prices,” said Cheryl Young, a senior economist with the real estate firm Trulia. “With little sign that homebuyers’ purchasing power will strengthen into 2019, expect the housing market to stagnate well into next year.”
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