Seattle Loses Race to Phoenix in 20-City S&P CoreLogic Case-Shiller Index
After a two year long lead in the 20-city S&P CoreLogic Case-Shiller index, Seattle has lost to Phoenix as the fastest-climbing home prices in October, as per the report published in late December.
Phoenix has been added to the list with Las Vegas and San Francisco as the top three metros with fastest growing home prices. Seattle now stands at the fourth slot.
The index of 20 cities has been on the growth of a minimum 5 percent over the years, and the growth of October from September stands at 5.2 percent.
As per a report by Northwest Multiple Listing Service, Seattle’s metro area has been growing on 7.3 percent rate, but the prices have dropped at 11 percent over the last six months, let alone growing.
It’s to be reported here that only seven cities have shown a decline in the house price, but none of them cross the mark of 0.4 percent decline, whereas Seattle has declined at 1.1 percent becoming the highest in the category.
There is a low demand in the national housing market owing to the super high pricing. Prices of houses have been growing at a rate more than wages. And a cut in taxes by the Trump administration has increased the budget deficit. As the Federal Reserve hiked the interest rates, it has led to a higher cost of borrowing.
As per Cheryl Young, a senior economist with the real estate firm Trulia, the purchasing power of the potential buyers is not going to grow any time soon, so we should expect another stagnant housing market the next year.
The decline in the growth in Seattle might have been the consequence of many other things. There was a great amount of apartment construction happening in Seattle, and there is also a decline in the interest of Chinese buyers. These reasons along with the uncertainty about the tech sector after Amazon’s decision of moving growth centers out of Seattle could have factored the decline.
As per the Index, Las Vegas has recorded the highest growth of 12.8 percent and San Francisco at 7.9 percent. Phoenix stands at 7.7 percent.
Six of the 20 cities in the Index have shown accelerating growth. Las Vegas has been the main center for housing all over the United States of America, but after the collapse in the 2007 recession, it has shown an unprecedented growth.
As per experts, the story behind Las Vegas is worthy to be analyzed as they have diversified their economy and added medical schools and attracting technological workers to the city. In Las Vegas, the employment is increasing at a rate more than that of the national average.
But the reason for the decline in the growth rate in Seattle has few reasons which are not totally unexpected. These are,
- More Houses, few buyers– After the construction of multiple apartments in the city, the demand has not been up to the mark of construction.
- Interest Rates– Though a national phenomenon, rising interest rates are a big factor in families postponing their plan to buy a house.
- Seasonality– The city has been showing the best of its growth in the months except for the time frame between May and November.
- Foreign Buyers– The foreign buyers have shown not a great deal of interest to buy houses here, for unknown reasons.
- Affordability– The city has become very expensive to live in. Owing to the unaffordability of the city, the demand for the Housings has shown a dip.
The Index shows the current scenario not only in the Housing Market but also in the city’s overall economic sector. In order to make the city lively again, we will need more jobs and promising career opportunities here.