Seattle space sees dramatic home-price will increase, particularly in among the most inexpensive cities

As this year’s spring buying season began, real estate prices in the Seattle area rose at the third highest rate in the country.

Single family home prices rose 18.3% year over year in March, a sign of how much the market has rebounded since the earliest days of the coronavirus pandemic. In major metropolitan areas, prices rose faster only in Phoenix and San Diego, according to the S&P CoreLogic Case-Shiller Home Price Index released Tuesday.

Phoenix prices rose 20% year over year and San Diego rose 19.1%. Seattle spent a year in second place before slipping behind San Diego last month. The Seattle area covered includes parts of Counties King, Pierce, and Snohomish.

Despite the widespread job loss, residential real estate demand spiked during the pandemic as many employees stuck to their jobs looking for more space amid the rock bottom interest rates. As demand increased, the number of homes for sale fell, driving prices higher and putting home ownership out of reach for more potential buyers. Seattle shoppers and realtors have had a heartbreaking year with home buyers struggling to hold their own against multiple offers and cash.

According to S&P CoreLogic Case-Shiller, year-over-year house price growth is at the level last seen before the Great Recession. The national increase of 13.2% in March was the highest since December 2005.

Nationwide, demand for home ownership is “20% above the 2017-2019 level,” said Selma Hepp, deputy chief economist at CoreLogic, in a statement.

“Since demand is in full swing and there is no break in sight, real estate price growth is likely to remain double-digit in the coming quarter,” said Hepp.

Investors also appear to be returning to the home market.

Among Case-Shiller’s top 20 metro areas, prices rose 13.3%, the highest increase since December 2013 year over year. However, recent growth in Seattle has been more dramatic, even compared to the month before the pandemic broke out. The last time Seattle saw home growth year over year – about 16% in February and 18% in March – was in 2006, according to the Index.

In the Seattle area, prices rose the most in cheaper Pierce County’s cities like Parkland, Tacoma, Graham and Spanaway, according to March of Zillow. For example, the year-over-year increase in typical home prices was nearly 18% in Tacoma versus 8% in Seattle.

“The pressures that have pushed house prices up at their fastest pace in years remain and prices continue to rise,” Zillow economist Matthew Speakman said in a statement.

Half of the Seattle properties for sale were pending in the Seattle area in just five days last month (meaning the seller accepted an offer), and Tacoma was one of the most competitive real estate markets in the country. Almost 74% of the properties sold above list price. after Redfin.