Catherine Weir
QUARTERLY UPDATE JULY 2021
is this hot market cooling? The S&P CoreLogic Case-Shiller National Home
Price Index released its numbers in May and found that Home prices throughout the entire US were 13.2% higher in March, compared with March 2020. That’s up from the 12% annual gain in February, and it marks the 10th straight month of accelerating home prices. I am often asked about this very fast home price increase and the inevitable, “are we in a bubble and when will it pop?” question. The gain that happened in March is the largest since December 2005 and is one of the largest in the index’s 30-year history. Prices are being pushed higher by incredibly strong competition in the housing market from buyers. The record-low housing supply is a result of bidding wars for the vast majority of listings. The 10-city composite rose 12.8% year over year with Seattle being one of
WHAT ’S INS I DE Eastside Market Updates, pg. 3
the top three cities leading the charge. This is a huge increase in home values. On average in the Seattle region 5% a year is the typical home price increase, right now we are seeing almost 3 years worth of growth in just one year. This leads many people to assume that if they wait, prices will come down or the “bubble” will burst. Many people ask me when I think home prices will go down. Personally, I just do not think they will. I think the growth rate will slow down to the historical average of 5% a year but I do not see a decrease or a bubble bursting like we did in 2008. There are some big differences between now and then. Back in 2008, home price growth was fueled by speculation, subprime mortgages of which a key component is loose loan practices and an oversupply of homes. This market in contrast is driven by mortgage interest rates at historic lows, a low supply of homes