Seattle home prices fell 4% from June to October after increasing 11% from January to June, according to the just-released Case-Shiller Home Price Index for October 2018. That Seattle decline was by far the largest of any of the 20 cities covered by Case-Shiller. It was quite a fall for Seattle which had been the national home appreciation star of 2017 with prices up 13% from January 2017 to January 2018.

The Case-Shiller Home Price Index is a 3-month moving average index so the October number represents prices for August through October. That also means the index tends to change slowly month to month which makes the size of the Seattle price decline even more surprising.

For the U.S. as a whole and in all the 20 cities covered by Case-Shiller, home prices increased from October 2017 to October 2018.

Price Momentum

The home price increases, however, were slower in the last 12 months than during the previous 12 months for the U.S. as a whole and 13 of the 20 cities.

Unsurprisingly, home price momentum slowed the most in Seattle which went from a crazy hot 13% appreciation (October 2016 to October 2017) to a still very hot 7% appreciation (October 2017 to October 2018).

San Diego, Dallas, New York and Portland also lost a lot of upward price momentum but ended up with good appreciation in the 3% to 5% range over the last 12 months.


A lot of people are worried about what home price appreciation might look like over the next 12 months and the next 12 months after that. The conventional wisdom seems to be that home prices will continue increasing in 2019 but at a slower rate. Prices are expected to have upward momentum in 2019 overall, just less upward momentum.

With the recent stock market declines, handicapping when the next recession will begin has become a popular topic. Will home prices fall like after the 2007 recession started or will home prices be more or less flat for years like after the 1989 recession started?

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