King County’s housing demands are continuing to have a pricey ripple effect in Pierce County and elsewhere, with home prices rising at a sharper clip in the Tacoma area than Seattle, based on year-over-year data.
In the latest Northwest Multiple Listing Service figures for August, median closed home sale price in Pierce County was $374,000, up 6.25 percent from the same time a year ago.
For comparison, King County median closed sale price in August was at $670,000, which was only a slight increase from a year ago. Snohomish County was at $490,000, a slight drop from the same time last year.
In the NWMLS news release with the August numbers, OB Jacobi, president of Windermere Real Estate, said: “Pierce County is now experiencing what King County did 24 months ago where a surplus of buyers and lack of supply are pushing up home prices.”
“The Seattle area housing market is still coming off the ‘sugar high’ that we saw last summer,” Jacobi said, “but homes sales and prices are stabilizing.”
Buyers aren’t just swarming Pierce County.
Thurston County’s median closed sale price for August was $348,500, up 9.56 percent from August 2018.
An even more dramatic uptick year over year for August was seen in Kitsap County, with a median closed sale price of $396,263, up nearly 15 percent from last year.
John L. Scott’s sales analysis for August in Pierce County noted “fewer new resale listings and unsold inventory, but more pending listings,” with a “severe” shortage of available inventory up to $500,000.
“For homes priced $500,000 to $750,000, sales activity intensity is strong, with a shortage of unsold inventory,” according to the analysis. For Thurston County, for homes priced $350,000 to $500,000, “sales activity intensity is a surge, with an extreme shortage of inventory.”
In a separate report issued Friday, real estate marketing and data company Redfin said that while the next recession “won’t be a repeat of 2008,” there still are some housing markets more vulnerable than others, particularly in the West.
According to the report: “Not a single metro area among the top 10 with the lowest risk of a housing downturn is west of the Mississippi.”
Redfin listed Riverside, California, Phoenix and Miami at greatest risk of a real estate downturn in a recession. Those with the least to lose: Rochester, New York, followed by nearby Buffalo and Hartford, Connecticut.
In its list of 50 metro areas, with No. 1 being at the lowest risk, the Seattle metro area came in at No. 36. Various factors were used in the rankings, including loan-to-value ratio, home price volatility and employment diversity.
Redfin chief economist Daryl Fairweather said in the report: “Home prices are high right now, but they’re high because there’s not enough supply to meet demand, which means there’s not a bubble at risk of bursting.”
In short, real estate won’t be the driver of the next recession.
“If the U.S. enters a recession in the next two years, it will likely be caused by the global trade war,” Fairweather said.