Washington housing market among the hottest during pandemic, report says. Here’s why

Washington’s home values are soaring and among the best in the nation during the coronavirus pandemic, according to a new report.

“The market is crazy in Washington state,” Steve Klaniecki, a spokesperson for the Washington Realtors, told McClatchy News in an email. “A lot of full cash offers, multiple offers over listing price, extremely short supply of listings and buyers making risky concessions in their offers.”

Washington ranks No. 7 overall in Bankrate’s hottest housing markets study — called the Housing Heat Index — which is based on key data points such as home appreciation, taxes and job growth.

Home values in Washington increased by 13.7% in 2020, Jeff Ostrowski, an analyst for Bankrate, told McClatchy News in an email. The typical Washington home in January 2020 cost around $417,000, while in January 2021, the price rose to about $470,000, according to Zillow’s Home Value Index.

The price spike has not deterred people from moving in from out of state — Washington’s population grew by nearly 80,000 residents between mid-2019 and mid-2020 according to Census estimates, Ostrowski said.

Though Washington was hit hard by the COVID-19 pandemic early on, new home construction increased in the state in the fourth quarter of 2020 and “Seattle-area home prices increased rapidly for a sixth consecutive month after three consecutive monthly declines,” according to March 3 report from the state’s Economic and Revenue Forecast Council.

With such a hot housing market, buyers have been choosing to purchase a home quickly rather than doing thorough research before making an offer, according to Klaniecki.

“Some desperate buyers are making ‘as-is’ offers and forgoing inspections,” he said. “You really need a professional [realtor] to represent you in this market.”

Washington ranked third in percentage of past due mortgages, sixth in home appreciations, 16th in taxes, 27th in job growth and 35th in unemployment, according to the report.

Washington outperformed its West Coast neighbors California and Oregon in “mortgage delinquencies, job growth and tax burden,” according to Ostrowski. Home prices increased by 11.5% in Oregon and 11.4% in California, which lost nearly 70,000 residents during 2020, Ostrowski said.

The top five states in the Housing Heat Index were Utah, Montana, Nebraska, Idaho and Indiana. The bottom five include Illinois, Louisiana, New York, Washington D.C. and Hawaii.

Bankrate, a personal finance company compiled information about each state’s housing economies in the fourth quarter of 2020 to calculate the “Housing Heat Index.” Bankrate analyzed housing markets using data from the fourth quarter of 2020, including from the Federal Housing Finance Agency’s Home Price Index, the Mortgage Bankers Association, the U.S. Labor Department, the center for Regional Economic Competitiveness and the Tax Foundation.

This story was originally published March 5, 2021 at 1:27 PM with the headline "Washington housing market among the hottest during pandemic, report says. Here’s why."