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2019 Seattle Housing Market Predictions - The outlook is bright!
It's that time of the year when I am questioned about what the Seattle-area housing market has in store for us all. Where there is no way for anyone to tell how our market conditions will evolve, there are some terrific data sources and Economists that I often consult to come up with my opinion. Click through for my predictions. 

First, let digest the 2018 market cool-down.

It’s no secret that the Seattle housing market saw a bit of this year for the first time since 2014 and has officially lost the title of the counties hottest real estate market. According to a recent report published on fortune.com, just six months ago, the average Seattle home sold for 6.3% above its list price. Today, it’s averaging 6.6% below that price. That drop is often paired with falling asking prices -  dropping 7% since spring. In my opinion, the Seattle real estate market slowdown is a sign that buyers have reached their limit after years of frenzied sales when coupled with rising interest rates. Even with this slow down, home prices have continued to increase, but at a must more gradual rate. 

What does this mean for appreciation in 2019? 

According to Zillow.com, the median home value in Seattle is $739,600. Seattle home values have gone up 4.5% over the past year, and Zillow predicts they will rise 1.1% within the next year. The median monthly rental prices averaged at $2,554 so far this 2018, which is 2% less compared to 2017 rent prices.

Let's talk 2019 appreciation by neighborhood. 

The top 5 highest appreciating neighborhoods for 2018 were First Hill, North Queen Anne, Bellevue, Eastlake, and North Beach according to Zillow.com. The chart below provides 2019 predictions by neighborhood. As always I am happy to discuss your neighborhood in more detail, especially if it’s not on this list. 

How does increased inventory and interest rates impact buyers and sellers in the year ahead? 

The Northwest Multiple Listing Service (MLS) published a report in October 2018 that stated, “there will double-digit increases in inventory.” MLS has property listings in 23 counties; they cover the whole Seattle metro area and Piece and Snohomish counties.

What this means for homebuyers is that there will be more property choices available in the market moving forward. Since the increase in supply will more or less meet the expected demand (when factoring affordability constraints), the rise of median prices won’t be as pronounced as we’ve seen in the past four years.

According to Inman.com, in 2019 interest rates will continue trending higher, but we may see periods of modest decrease or leveling.  We will probably end the year with the 30-year fixed rate at around 5.7% - current rates are hovering about 4.8%, which means that 6% interest rates are on the horizon for the 2020 predictions. 

Keep in mind for every .5% (one-half)  percent increase in interest rate your purchasing power may be decreased by 4 to 5 percent (the percentage is smaller for lower loan amounts). For every 1 percent interest rate increase, your purchasing power may be decreased by 9 to 11 percent (the percentage is smaller for lower loan amounts). The prediction of increased rates will undoubtedly motivate some, payment dependant, buyers to buy in 2019. 

Final Thoughts on 2019

Every indication points toward a continued upward trend in housing prices in Seattle and the Eastside. Trends in population and income growth, charged by the tech sector growth in the Seattle region, support the idea that our city will continue to have high housing prices and remain competitive. Housing prices shouldn’t rise nearly as high as in recent years, but overall Seattle remains a stable, non-bubble, market.

With the rise in inventory, Buyers will have more options and opportunity to secure a home in Seattle this year, but buyers will need to act quickly to get the best deals and keep an eye on interest rate fluctuations. For Sellers, expect longer time on market and an emphasis on home preparation to ensure you make the most of your investment. For some properties, multiple offers are a thing of the past. Patience and proper pricing is the key to many sellers success this year. 

As always, I am here to discuss your real estate needs and provide more concrete recommendations based on your personal needs to make the most of your real estate assets. 


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