Home prices and rents in the central Puget Sound have been rising at some of the highest rates in the nation over the past few years.
Robust job and wage growth driven by the region’s technology sector, along with population growth, have created strong housing demand pressures, while historically low inventory of homes for sale has constrained supply.
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The combination of these factors together has resulted in a near-doubling of home prices since the last recorded low in early 2012.
The median home price for the Seattle-Tacoma-Bellevue metro area has increased by 94% since then to $492,000.
There is wide variability in home prices among the region’s four counties, with prices in Kitsap and Pierce counties lower than the metro area median, while prices in King County are substantially higher.
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Housing affordability indices for King County show that the price of the typical home surpassed levels affordable to the typical family in early 2016, and affordability has continued to erode since then.
Monthly median rent for the Seattle-Tacoma-Bellevue metro area has increased by 45% to $1,900 since March 2012.
Multiple data sources suggest that the recent boom in apartment construction has finally produced enough new supply to relieve the demand pressures on rental prices.
However, the rapid and sustained annual increases in rents over the past several years have resulted in serious housing cost burden for many of the region’s renter households, with the biggest impact falling on lower income renters.
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Households are considered “housing cost burdened” if they spend more than 30% of their gross annual income on housing costs, including utilities. A household is defined as “severely cost burdened” if its housing costs constitute more than 50% of gross annual income.
One-third of moderate income renter households earning $50,000 to $75,000 per year are housing cost burdened, with 3% experiencing severe cost burden. The share of cost burdened and severely cost burdened households is much larger for lower income households.
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