Here’s one more sign of cooling in Seattle’s hot housing market

Seattle’s housing market may feel red hot, but try to tell this to home buyers in Phoenix, San Diego, Tampa, and Dallas.

After months as the third hottest housing market in the country, the Seattle area slipped to fifth place in a ranking of price increases for single-family homes published on Tuesday. The rankings are another indicator that a fall cooldown has arrived in the Puget Sound region, with prices flattening out, buyers with fewer bidders fighting, and sellers offering occasional price drops.

Still, home prices here are up around 24% year over year, according to the S&P CoreLogic Case-Shiller Home Price Index. That’s a bigger increase than in New York, Los Angeles, Portland and San Francisco, among others.

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The index, which uses a three-month moving average of home prices, reflects parts of Counties King, Snohomish and Pierce. The measurement is delayed by two months, so this week’s data reflects home sales through August.

Phoenix topped the list for the 27th straight month, this time up 33% year over year.

Across the country, home prices have increased by almost 20% compared to the previous year. That’s roughly the same as the surge in July, suggesting “that while house price growth is still very strong, it may be slowing,” said Craig Lazzara, managing director of S&P, in a statement.

The deputy chief economist of CoreLogic, Selma Hepp, called the numbers a sign that “buyer fatigue sets in, especially for higher-priced houses”.

Housing markets across the country heated up shortly after last year’s pandemic, fueled by a combination of low interest rates that attracted more buyers, potential sellers holding onto their homes, limiting the number of homes for sale, and Investors and Millennials trying to make money in the market.

The rise in prices makes home ownership more difficult – and not just because of bidding wars.

As prices rise, so do mortgage payments for new homebuyers. For shoppers who made a 5% down payment in the Seattle area, the average monthly mortgage payment last month increased 12% year over year, according to Redfin.

With the proliferation of teleworking, local buyers outside of big cities like Seattle face the toughest competition.

In King County, for example, average house prices increased 26% in August compared to 2020 on the East Side, 16% in the southwest of King County, and 18% in the southeast of King County compared to 2020, according to separate data published in the beginning published this month by the Northwest Multiple Listing service.

In Seattle, the average home price of $ 850,000 rose 4% over the same period in 2020. In Bellevue, east of Interstate 405, the average home price of $ 1.3 million last month was 29% higher than last year .

The Snohomish and Pierce counties have become more competitive for home buyers, said Jeff Tucker, Zillow’s chief economist.

“Demand in these cities has risen sharply due to the diminishing importance of commuting times, as more and more employees assume that they only go to their office occasionally, if at all, and now feel confident enough to buy a house based on that expectation.” said Tucker in a statement.