Originally published November 29, 2016 at 6:47 am Updated November 29, 2016 at 7:54 am
Portland had been the nation’s hottest housing market all year, with Seattle second, but the rankings flipped this month. After trailing Portland all year, the Seattle area has finally reached a dubious distinction as the hottest housing market in the country.
It marks the first time in nine years that Seattle has led the country in home-price growth.
The typical single-family home across King, Snohomish and Pierce counties cost 11 percent more in September than a year prior, according to the monthly Case-Shiller home price index released Tuesday. That marked the biggest increase among the 20 major metro areas covered.
Fastest-rising home prices compared to a year ago
1. Seattle: +11%
2. Portland: +10.9%
3. Denver: +8.7%
4. Dallas: +8%
5. Tampa: +7.5%
Source: Case-Shiller home price index
Seattle narrowly topped Portland, where home values gained 10.9 percent. For the prior eight months, Seattle had seen its home-price growth sit second in the country behind Portland.
All other areas saw single-digit growth, with Denver, Dallas and Tampa, Fla., again rounding out the top five.
Overall, Seattle prices are rising twice as fast as the rest of the country, as they have for most of this year.
In a big moment for the nationwide housing recovery, the data showed that for the first time, national home prices in September surpassed their pre-recession peak. But homes are still cheaper than they were a decade ago when factoring in inflation.
The Seattle area had already broken its old record earlier this year after seeing prices rise for more than four straight years. The region has seen home values jump nearly 60 percent since early 2012.
The price increases are starting to have a big effect, as the Seattle area is moving up the ranks of the most expensive regions in the country to live.
Seattle-area home values are the fifth-priciest among the 50 biggest metro areas in the country, behind San Jose, San Francisco, Los Angeles and San Diego, according to a Zillow analysis. In the past year, Greater Seattle surpassed the Boston, New York and Washington, D.C., metro areas on the list of most expensive regions to buy a house.
The Zillow data shows that home values across the Seattle metro area — King, Pierce and Snohomish counties — topped $400,000 for the first time a few months ago, up from $300,000 just three years prior.
The latest figures from the Northwest Multiple Listing Service showed the median single-family house in October cost $550,000 in King County, $387,000 in Snohomish County and $280,000 in Pierce County.
Despite the big year-over-year increase, Seattle home prices typically peak in the spring and slow down this time of year.
Indeed, the Case-Shiller data showed that prices remained flat compared to a month ago, even as national home prices gained slightly from the prior month. But that’s mostly a function of how Seattle’s housing market typically works; when adjusted for normal seasonal changes, Seattle’s monthly home-price change looks about the same as the nationwide increase.
What’s more, the annual home-price increase is actually starting to slow slightly. Last month, the index for Seattle reported its biggest annual gain in more than two years, with home values rising 11.4 percent, but that figure has since dropped to 11 percent.
Ralph McLaughlin, chief economist at Trulia, noted that September was the first time Seattle had led the Case-Shiller index in annual home-price growth since August 2007. That was during a much slower time for home prices: At that point, Seattle’s 5.7 percent increase narrowly beat out Charlotte, N.C.
McLaughlin said Seattle overtaking Portland atop the housing price-growth standings “is about as symbolic as an old-school SuperSonics victory over the Trail Blazers.”
“Seattle leading the country in house-price growth is a testament to how attractive the region has become,” McLaughlin said. “The Pacific Northwest is now to the U.S. housing market what California was at the beginning of the recovery: a beacon of strong gains in employment, income and quality of life.”
Mike Rosenberg: email@example.com or 206-464-2266; on Twitter @ByRosenberg.