Though recent shifts in supply and demand have tempered the rapid and massive price gains of the past few years, home prices in June were still up a healthy 7.2% year over year for Seattle single family homes and a more robust 10% in King County.
Prices rise when demand outpaces supply, and the lack of new construction during the recession left supply falling significantly behind growing demand. Simply put, not enough new homes were being built to keep pace with population growth, especially for a city (Seattle) who has been at or near the top of the lists of places people are moving to.
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Combine the lack of development during the past six years and the lack of developable land in Seattle, and it’s easy to understand why home buyers are paying a premium for new construction.
How much do new homes cost in Seattle? During the 2nd Quarter of 2018, the median selling price for new construction homes in Seattle, excluding condos and townhouses, was $1,199,500. New construction homes accounted for 7.1% of homes sold.
Compared to existing homes, the median new home in Seattle sold for 49.6% more than existing homes ($802,000) during the 2nd Quarter of 2018. Yikes.
Let’s look at Bothell for the sake of comparison. Bothell, to the East of Seattle and spanning from North King County to South Snohomish County, has plenty of developable land… whereas Seattle is almost completely built out.
During the 2nd Quarter of 2018, new construction homes in Bothell, excluding condos and townhouses, sold for a median price of $821,945. New construction homes accounted for 34.1% of homes sold.
The $821,945 median selling price for new construction houses in Bothell represents a 23.6% premium compared to the $665,000 median sale price of existing homes.
*Information and statistics derived from Northwest Multiple Listing Service