February 2020

Washington Housing Market Vitality

forecast

Outperform

Washington metro area house prices are forecasted to outperform the national market. Current local conditions support an estimated 13.9% increase in the next twelve months. Washington’s housing market vitality, based on the fourteen metro housing markets which comprise it, is stronger than that of the overall U.S. and currently ranks the state as first in the nation. Recent changes in local conditions suggest the possibility of improvement in short-term performance.

Housing Market Vitality

Housing Market Vitality summarizes the impact of economic conditions on future house prices. A value of 100 corresponds to conditions supporting current prices; values less than 100 correspond to a dampening effect; and values greater than 100 indicate a positive effect on house prices.  A housing market vitality value can be interpreted as a forecasted growth rate. Hence, a reading of 105.8 can be interpreted as a forecasted 5.8% annualized increase in house prices.

Washington Metro Housing Markets

Washington is comprised of fourteen metro housing markets that account for nearly 90% of the state’s population. The markets are unique in their demographics and local economies and exhibit trends that are distinct from the national or state narrative. Each metro market presents its own unique opportunity.

METRO AREA FORECAST US METRO RANK (/402)
Bellingham, WA Outperform 31
Bremerton-Silverdale, WA Outperform 9
Kennewick-Richland, WA Outperform 55
Lewiston, ID-WA Underperform 204
Longview, WA Outperform 11
Mount Vernon-Anacortes, WA Outperform 4
Olympia-Tumwater, WA Outperform 71
Portland-Vancouver-Hillsboro, OR-WA Outperform 14
Seattle-Bellevue-Everett, WA Outperform 140
Spokane-Spokane Valley, WA Outperform 36
Tacoma-Lakewood, WA Outperform 8
Wenatchee, WA Outperform 157
Yakima, WA Outperform 197
Walla Walla, WA Outperform 92

Industry Specialization

Washington’s state economy is specialized in Construction, Fncl activities, and Information. Mining, Manufacturing, and Edu Health svcs industry sectors are less important to the state economy compared to the national economy.

Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.

Demographics

Compared to the U.S., there is a lower incidence of poverty amongst Evergreen State residents and they have greater purchasing power. There are more high school graduates and a larger proportion of the population is college educated. Washington’s population is comparatively less diverse than the overall U.S. population.

A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.