The Case-Shiller Home Price index was released on Tuesday and showed that average Seattle home prices experienced a fourth consecutive drop in January. Year-over-year prices were up 11.9% in January but down from 12.4% in December. Seattle and Chicago had the biggest declines of any major cities that month.
Redfin Economist Ellen Haberle had this to say about the drop:
"Unlike many of its West Coast neighbors who are seeing inventory loosen, Seattle is facing the double whammy of worsening affordability and inventory, which is causing home prices and sales to lose momentum. Without a boost in new inventory in the coming months, we are likely to see home prices in Seattle tick up as more buyers enter the market and compete for the limited number of homes for sale." Meanwhile on the rental front, Dupre & Scott released a report earlier this week noting that the Puget Sound region vacancy rate is 3.6%, down from 4% last Fall. The vacancy rate has only been this low once before since 1980, which could mean this is the calm before the storm in terms of apartment building. And you thought there were already too many apartment complexes being built around town.
D&S also blocked out some info on specific neighborhoods:
The gross vacancy rate on Capitol Hill is just 3.6%. West Seattle is at 4.5%. Downtown Bellevue is 5.1%. The Belltown/Downtown/South Lake Union market is 8.6%, but just 3.9% when you exclude the new units in lease-up. Ballard's market vacancy is a mere 2.8%. But its gross vacancy rate is the highest in the region, at 17.3%. Now that's downright scary, isn't it? Yes and no. If Ballard was a city with 100,000 rental units and it had a 17% vacancy rate, then yes that would be scary. But there are fewer than 2,500 units in Ballard. That means there are 423 vacant units right now. And since developers increased the total supply of rental housing by more than 50% in Ballard over the past 18 months, it's doing pretty well.
Just don't tell that to these guys...
· If this is the calm before the storm… [Dupre & Scott]