Home prices in the Seattle and Portland metro areas are rising faster than anywhere else in the country right now — about twice as fast as the national average.
The latest S&P CoreLogic Case-Schiller home price index increased by 11 percent year-over-year through September 2016 in the Seattle metro area, the fastest among the top 20 housing markets measured. The Portland metro area came in right behind Seattle with a 10.9 percent increase for single family home prices over the past year.
Professor Gerard Mildner at Portland State University’s Center for Real Estate said you can boil this down to strong economies meeting limited inventory.
“Unfortunately, we’re not building enough housing units,” he said. “I don’t think that is well understood. We’re building about 20 percent fewer housing units in the last three years as compared to 1990 to 2007.”
Mildner sees some signs that price increases may be tapering off, and there are a lot of new apartments in the pipeline. But he said the local political and regulatory climate suggests housing supply will remain tight over the medium term.
“I think we face a chronic problem,” Mildner said in an interview Tuesday. “People in this region will need to be high savers so that they can break into that market.”
If it’s any consolation, despite the eye-popping average sales prices in the Northwest’s biggest cities, the region still trails California’s major metro areas by a lot.