Real estate company Redfin, in a new report published online Friday (May 24), has declared the Tacoma metro area as the nation’s hottest housing market.
Yes, the entire nation.
The report cites Seattle’s high prices for the continuing drive southward.
According to the report, “The Tacoma metro topped the charts in mid-May, when 50.2 percent of recently sold homes went under contract within two weeks — a higher share than any other metro — with the typical home finding a buyer in just eight days, the shortest median time on market nationwide.”
The report also points to the area’s tight supply of inventory. And, in bad news for those looking for bargains, we’re now into California metros territory in terms of what people are willing to pay above price to get a home here.
“Another sign of the hot housing market in Tacoma is that 49.7 percent of homes sold above asking price for the four weeks ending May 19, more than any metro except San Francisco (66.7 percent), Oakland (58.7 percent) and San Jose (54.5 percent), which also happen to be the three most expensive metros in the country by median home sale price,” according to the report.
“Tacoma home-sale prices were up 6 percent year over year to $370,000 (median) in mid-May, as sales fell 5.5 percent and inventory dropped 12.5 percent.”
Tacoma’s median price is still significantly lower than Seattle’s at $595,000, but higher than the national median of $314,876.
“Ordinary homebuyers have gotten fed up with home prices in Seattle, largely because most people aren’t able to compete with highly paid tech workers and executives at companies like Amazon,” Ellen Campion, a Redfin agent in Tacoma, said in the article.
One caveat: The percentage of offers competing with Redfin offers, according to the article, was not as high as it was last year — a similar trend the company had seen in other West Coast cities, which may speak more to decreased inventory than demand.
Taylor Marr, senior economist with Redfin, told The News Tribune on Friday that the decline in bidding wars reflected “more of a cooldown across the country but most precisely in West Coast metros,” but added that Tacoma rebounded “stronger than other places,” by spring.
“Even last fall, Tacoma held its own,” he added.
Redfin agent Ashley Sprecher gave a shoutout to Tacoma neighborhoods attracting families.
“In addition to offering more affordable housing options, Tacoma is becoming a vital city in its own right,” she said in the article. “Some of the neighborhoods, like Old Town, Proctor District and the West End are becoming revitalized, and they’re great for families looking for walkability.”
The report adds to recent coverage about Tacoma’s rise in the ranks of metros. A May 8 Stranger article, “Tacoma is Positioned to Displace Seattle as the Region’s Center for the Arts,” drew attention to the city’s investment in the arts.
Margo Wheeler, a broker in John L. Scott Tacoma’s University Place office, said, “Homes that are in move-in ready under $300,000 are going under contract in less than 2 weeks. If they are under $250,000, offers come in within days of listing.
“I had a 756 square-foot home listed on last Wednesday, it received more than 20 showings and five offers within three days.”
Tacoma City Council member Anders Ibsen, who works in real estate, said it wasn’t just the lower prices compared with Seattle that was attracting people to the area.
“Prices aren’t simply increasing here because King County people are being displaced and ‘settling’ for our community,” he told The News Tribune via email. “People across the country are realizing what vibrancy, economic opportunity, and natural beauty Tacoma has to offer, and that’s really what’s driving up demand for our housing market.”
He added, “While an expanding market is ultimately good for our economy and region, we have to be especially sensitive to the need for additional affordable housing opportunities, and that will continue being a priority for our city.”
Council member Robert Thoms, in an emailed response, told The News Tribune on Friday: “Quality of life is my top priority, and having wise infrastructure investment is critical, and the revitalization efforts are welcomed by many; however, as a city we must find ways to mitigate impacts and protect our wonderful neighborhoods. Quality of the neighborhoods is why there is a surge.
“While many focus on the challenges associated with a hot housing market, I believe it is a good challenge to have because it requires us as a community to up our game .... We need more housing at all levels, we had shortages after the 2008 crash and we haven’t been able to keep up, so I am eager to work with developers and the private sector to increase units and churn necessary to have housing available to all income levels.”
Dick Beeson, principal managing broker of Re/Max Northwest in Gig Harbor, noted that if homes are priced right in the Tacoma metro, “It sells in a New York minute.”
His latest scan of numbers in the Northwest Multiple Listing Service, he said, showed “there is under one-month supply of homes for sale in Pierce County. In some neighborhoods, under a half-month supply.”
He also cautioned that not every seller strikes it rich.
“If a property comes on the market in certain parts of Tacoma and doesn’t have an offer within 7-10 days, the seller and their agent missed the price,” Beeson said, “and they may end up sitting on the market for an inordinate amount of time, 60-plus days and sell for less than they should have.”
At the heart of this remains affordability issues and being priced out of the market.
Molly Nichols of FutureWise, who has repeatedly advocated for affordable housing at City Council meetings, said Friday’s report further underlines the need for affordability.
“This report is just further evidence that the City needs to take bold immediate steps to ensure we have affordable housing,” she told The News Tribune via email. “When the market heats up like this, longtime residents, especially people of color, are forced out and unable to enjoy the amenities and benefits of living in Tacoma.”
She noted that “a number of organizations are working on developing community land trusts where land is collectively owned, which helps keep prices from going up so quickly. This would be a great step. And of course these kind of home sales have an impact on the rental market.”
Rents have been a repeat topic at council meetings, most recently in the battle over a downtown development that requested changing its tax exemption to one that allowed all market-rate instead of a percentage of affordable units.
Additionally, the lingering effects of those displaced last year, most notably from the Tiki Apartments, still resonate.
“Tacoma passed tenant protections last year,” Nichols noted, “which are benefiting people across the city, but we still need more, including Just Cause to help keep tenants in their homes.”
Thoms noted that Tacoma’s work for growth continues.
“We can grow our housing stock to take some pressure off the market, especially as it relates to affordability that is important, but Tacoma should strive to be the best place to live, not just the most affordable,” he said. “I am eager to see continued value and growth in our market and I’m excited about developments in the Dome District where transit oriented developments are taking place supporting the eventual Sound Transit spine opportunity.”
Mayor Victoria Woodards had her own take on the news in a statement sent to The News Tribune on Friday:
“As people are priced out of higher priced housing markets, many are drawn to Tacoma due to its relative affordability, and overall attractiveness as a place to live and raise a family, establish and grow a business or simply enjoy world class art and other lifestyle amenities.
“The City of Tacoma, like others across the nation, has been working to tackle the challenges presented by accelerating housing market conditions. We’ve developed an action strategy to address housing affordability which includes the creation of new housing, keeping existing housing affordable and in good repair, helping community members stay in their current housing and reducing barriers for those who often encounter them.”