Transplants Are Pricing Locals Out of Red Hot Washington Towns
2020 was a banner year for Washington real estate as the state continued to draw in those relocating amid the pandemic. In fact, for every two people that left Seattle, three moved in. The influx of “Zoom Town” transplants, those working from home and shopping for a new scenic space, even yielded many Washington agents their “best year ever.” While local sellers and agents alike benefit from increased home prices, buyers could face an increasingly aggressive market moving forward.
Rising Home Prices in Washington
Washington’s housing market is nothing short of red hot. Exploding demand has resulted in rapidly rising prices, with the average home value increasing 11.3% statewide over the past year, and a whopping 13.0% in the desirable Seattle-Tacoma-Bellevue metro area. Kittitas County saw the highest year-over-year growth, though, at a staggering 21.0%.
Prices have skyrocketed as an influx of transplants relocated to Washington, a state that marries a robust digital economy with the amenities and freedom of a more sparsely populated state. It’s the perfect fit for many COVID-19-era moves! Amid this increased demand and rapidly rising prices, agents and sellers alike have brokered some seriously profitable sales, but buyers are facing an uphill battle.
How Washington’s Rising Prices Could Spell Trouble
Washington has long been regarded as one of the least affordable states in the nation, and inventory was limited even before the pandemic. In September 2020, the statewide average income comprised only 16.2% of a home's purchase price. Rising demand and prices do little to help, as transplants with more disposable income are often able to outbid long-time residents. Inventories of affordable homes will dwindle smaller and smaller until thousands of Washingtonians are effectively priced out of their local housing market.
Proposed remedies include new zoning laws, tax credits, and rent subsidies. Innovative programs, increased efficiency, and fee waivers are other well-documented tactics that could help. Advocating for equality and affordability in homeownership, however possible, is critical moving forward.
While rising home prices are a sign of opportunity for agents across the nation, it’s important to understand the bigger picture. Healthy supply and demand in the real estate market promotes equity and access in homeownership. As Washington’s economy stabilizes, the hope is the red hot real estate market will continue to simmer without erupting into an affordability crisis.
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