A neighborhood along Lake Washington in Seattle.
Aerial view of a neighborhood in Seattle.
Houses in Seattle, Washington.
A new market report from Seattle-based Zillow found long-distance movers coming into the Emerald City relocated into ZIP codes where home values were $260,754 higher than where they moved from. That disparity shows how average home prices have skyrocketed amid the COVID-19 pandemic, with the report finding that home prices in the city were up 14.6% over their 2019 levels.
Residents who bought homes got less space, moving into homes that were an average of 56 square feet smaller than ones in their origin ZIP code.
However, those moving out of the city were able to cash in on those increasing values and sought out more affordable areas: the study found that those who moved out of Seattle went to ZIP codes where the average home is worth $264,337 less than the Emerald City.
Those two statistics subvert a nationwide trend Zillow noticed called the great “reshuffling” as buyers elsewhere are moving into large, more affordable homes. The average long-distance mover in the country relocated to a ZIP code with home values nearly $27,000 lower than where they came from, according to the report. Movers also flocked to ZIP codes where homes sold were 33 square feet larger on average than where they came from.
“The ability to sell in a relatively expensive market and relocate somewhere more affordable — either to save money or get more bang for their buck with a larger property — was extremely attractive to movers [in 2020],” said Jeff Tucker, senior economist at Zillow.
Seattle was also ranked at the bottom of a list of the best ‘bang-for-the-buck’ real estate markets in the country last month, meaning homebuyers were getting the least for their money.
Overall, Seattle ranked fifth in the nation for buyers experiencing “sticker shock” at the high prices, with the top four cities all located in California: San Jose topped the list with home values an average of $1.3 million higher than the areas they moved from. San Francisco, Los Angeles and San Diego followed in second, third and fourth respectively.
The metros where buyers actually had the upper hand, and were paying less for more space, were located on the East Coast or South. Cleveland topped the list for cities where buyers could expect lower local home values, with prices an average of $197,369 lower than in the areas they moved from.
Despite record-breaking increases in median prices last month, demand for houses in Seattle still remains high, largely driven by low inventory. A new report from the Northwest Mutual Listing Service (NWMLS) found active listings in Seattle from April to May declined for the first time in 20 years, down 4,824 listings — or 46% — compared to last year.
Driven by low inventory and competition, homes were also selling above the asking price. The report found that residential homes in the Puget Sound region — comprising of King, Snohomish, Kitsap and Pierce counties — sold for 108.6% over the asking price.
“The dramatic increase in prices and low inventory just continue in such a way that although we have more inventory coming on the market, it is immediately absorbed because of a demand that simply cannot be met,” said NWMLS Director John Deely, executive vice president of operations at Coldwell Bank Bain.