The average price of existing single-family homes in the Seattle area jumped 1.2 percent in November from the previous month, outpacing the 0.9 percent increase in a 20-city index, according to Standard & Poor’s/Case-Shiller index data released Tuesday.
November’s monthly gain was slightly weaker than October’s 1.3 percent gain over the previous month, after taking seasonal fluctuations into account. The 20-city index posted a 0.8 percent gain in October.
Over the year, the average price of existing houses in King, Snohomish and Pierce counties rose 9.7 percent, far before the 20-city index’s 5.8 percent gain, according to S&P Dow Jones Indices, publisher of the index. November was the Seattle index’s fourth consecutive month of rising year-over-year gains.
Even with its big annual increase in home prices, Seattle wasn’t at the head of the pack: Portland, San Francisco and Denver led the 20-city index with double-digital annual gains around 11 percent. Chicago and Cleveland saw the lowest annual increases of about 2 percent.
All 20 metros saw their home prices gain in November over the previous month after seasonal adjustment.
“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” David M. Blitzer, chairman of S&P’s index committee, said in a news release.
While the national index is still about 12 percent off its mid-2006 peak, the recovery from the housing bubble’s collapse is complete in some cities. Dallas, Denver and Portland have reached new all-time highs, Blitzer said, while San Francisco has matched its earlier peak.
The Seattle area is just 3.2 percent below its July 2007 peak, with strong tail winds favoring sellers. The Northwest Multiple Listing Service reported King County’s median single-family home price in December soared 13.6 percent over the year.
Buyers must contend with the worst shortage of homes for sale since the early 1990s, sluggish growth in single-family building permits and competition from buyers paying cash.
In November, cash sales in the Seattle area spiked 38 percent over the year, the biggest increase since May 2011, according to RealtyTrac, an Irvine, Calif.-based data provider.
Nearly 40 percent of home sales in King County in November were all cash, compared with 22 percent in October, RealtyTrac reported. More than one in four sales in Snohomish County were all cash as well, up from 15 percent the previous month.
“I believe that we can attribute this to the remarkably tight housing market in Seattle,” Matthew Gardner, chief economist at Windermere Real Estate, said in a statement. “Buyers that have the ability to pay cash understand that they are in an enviable negotiating position when offers are being reviewed.”
While cash sales are common in the luxury market, first-time homebuyers have had to compete in the lower end of the market with Wall Street firmsand foreign buyers.
Seattle-based Zillow, which also tracks home prices, reports that the median single-family home value in the Seattle area rose 9 percent in November over the past 12 months to $383,700.
While Case-Shiller’s index is based on just those homes that sold over the last three months, Zillow’s index includes all homes in a market, using recent sales as one of several factors in estimating price trends.
In December, Zillow estimates the median home value in the Seattle area rose 9.2 percent over the year to $368,700, amid a nearly 30 percent lower inventory of homes for sale. Meanwhile, the median rent was $1,931 for a single-family home, up 7.2 percent over the year.
“Rental growth has slowed significantly and is expected to slow even further, giving renters a bit of breathing room and potentially easing the transition into homeownership for some,” Zillow Chief Economist Svenja Gudell said in a statement. “And as local economies pick up steam, less-heralded markets in Middle America — such as Boise, Idaho, and Ogden, Utah — may become very attractive to buyers in search of good job prospects and a decent homebuying value.”