Zillow: Seattle housing prices will continue to climb in 2018, but not as quickly

It’s been an explosive few years for Seattle home prices, with median home values hitting new records all the time—reaching $700,000 in the city limits back in April. We ended the year with median rent of around $2,000 per month for the whole metro.

A new report from Zillow suggests that still, there’s nowhere for those numbers to go but up. The real estate group’s 2018 forecast ranks the Seattle metropolitan area, which includes Tacoma, Everett, and Bellevue, third in hot markets for 2018, behind San Jose, California and Raleigh, North Carolina.

Zillow predicts that our home values will jump another 5.4 percent in 2018, while rents will jump 3.5 percent. While that’s still an uptick, it’s a slower amount of growth than actually occurred in 2017, when home values grew a whopping 12.3 percent rents climbed 5.4 percent.

One thing that Zillow factors into its hot-market prediction: a growing population and rising incomes. Census data analyzed by Moody Analytics used in the report showed a 4.4 percent growth in income over the past year, although that doesn’t mean that everyone’s income is going up—that could be attributed higher-wage jobs, people of lower incomes being priced out of the area, or a combination.

At the neighborhood level, Zillow had some additional predictions for the fastest-appreciating Seattle-area markets, and Kirkland makes up three of the top five. Kirkland’s Totem Lake neighborhood topped the list—Zillow’s predicting a 9.1 appreciation there. Behind that are Belltown (8.8 percent), Houghton (also in Kirkland, 8.4 percent), Riverview (Duvall area, 8.2 percent), and Kingsgate (another Kirkland, 8.1 percent).

• San Jose and Raleigh are Zillow’s Hottest Housing Markets for 2018 [Zillow]