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What Would It Take to Bring Seattle Home Prices Down to Earth?

Published on September 20, 2022

Construction of two high rise buildings in Seattle
Image Credit: Joe Mabel (CC ASA 4.0 International)

However you slice it, Seattle homebuying is wildly expensive. The median sale price for all homes is $840,000, according to Redfin. If you look only at stand-alone single-family homes, the median is $975,000. The median condo is selling for over $500,000.

Supply and demand isn’t the only factor in Seattle’s housing costs — 50-year-old bungalows wouldn’t be selling for $850,000 if there weren’t high wage earners here to buy them. But construction has lagged behind population growth. Between 2010 and 2020, the city gained about 130,000 residents. At the same time, Seattle gained just over 63,000 new units of housing, according to a 2021 report issued by the city. Of those, 80% of those were rental apartments, compared to 8% for townhomes and 8% for single-family homes.

Arthur Acolin, an assistant professor at the Runstad Department of Real Estate, has some optimism about the theoretical impact a sufficient supply could have on home prices. But in practice he expects an increased supply to mostly help flatten price growth in Seattle.

“Prices would increase with income, which is what you would expect in a functioning market,” he said. “There is a lot of fear that new construction in your immediate surroundings will destroy home value. There’s very little empirical evidence that that’s the case. But there is some evidence it would moderate the prices.”

Continue reading at Crosscut.

Originally written by Josh Cohen for Crosscut.
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