Five years ago, a typical young Seattleite looking for a starter home spent one-third of their income on a small house in Greater Seattle, according to Trulia. But things have changed. Now, the run-of-the-mill starter home here requires half of household income for those buyers, reports The Seattle Times.
The average single-family home in the Seattle metro area cost 12.9 percent more in April than a year ago, according to this week’s release of the Case-Shiller home price index. That’s way ahead of the rest of the country. Portland was in second place and still far behind at 9.3 percent growth. Seattle has been number one in the nation for home-price growth every month since September.
The median price of a house is now $729,000 in Seattle. On the Eastside, it’s a whopping $875,000. The scene is shaky further out too. Prices are now at record highs in Snohomish, Pierce and Kitsap counties, reports the Seattle Times.
This does not bode well for young, wannabe homeowners. A mere 29 percent of Millennials in the Seattle area own homes, among the worst rates in the United States. Young adults own only about 9 percent of the homes here.
Starter homes have traditionally been the cheapest one-third of homes on the market. But prices for these usually small and damaged properties has nearly doubled, while incomes have not come close to keeping up. Simultaneously, the total number of starter homes on the market has dropped in half since 2012.
According to new research from the rental website ABODO, the average Millennial in Seattle would need to save up for 14.5 years just to afford a 20 percent down payment on the typical small starter house. That assumes Millennials are able to save 15 percent of their income each year, a nearly impossible task with the high cost of rent. Rents in Seattle have now climbed 57 percent in the last six years, costing the average renter an extra $635 a month and forcing many residents to leave King County.
The Seattle Times points out that things may improve soon. There has been an increase of homes on the market and a lessening of demand as the spring rush comes to an end.