Seattle’s housing market is showcasing signs of stability, even as other major Sun Belt cities experience notable slowdowns.
According to Redfin, Seattle had about 10% more homes than buyers in April, indicating the emergence of a buyer’s market.
In stark contrast, cities like Miami, Austin, and Phoenix have seen a pronounced downturn in the housing demand, diminishing the allure that once drew many to these warmer locales.
Rising housing costs in these Sun Belt cities are undermining one of the main attractions for migrants.
Natural disasters, such as hurricanes and flooding, are exacerbating the situation by inflating the cost of homeownership.
Redfin’s Chief Economist Daryl Fairweather highlights this connection, noting that increased insurance costs, driven by climate change, directly affect buyers’ budgets.
“If you’re spending more on insurance, that’s less money you can afford to spend on your mortgage,” Fairweather stated.
The burgeoning cost of living in the Sun Belt, combined with the fading trend of remote work, is further complicating the housing situation.
As a result, migration rates in Florida have significantly declined.
In fact, migration to Tampa in 2024 was less than one-third of what it had been the previous year, while movement to Orlando has nearly stalled.
Seattle, too, has experienced a dramatic halt in migration, with numbers plummeting to half of the 2023 figures.
Despite the deceleration in people moving to Seattle, its housing market remains comparatively stable.
One of the main distinctions between Seattle and the Sun Belt is the approach to urban development.
Cities like Phoenix have relatively relaxed zoning laws, facilitating rapid construction of new suburban housing developments.
As these areas experience slower buyer demand, they often end up with an oversupply of homes, which can happen frequently at the end of a construction cycle.
Conversely, Seattle has stricter regulations that limit suburban sprawl due to its geographical constraints, bordered by mountains and the sea.
The state’s commitment to preserving farms and forests and reducing long commutes further constricts the ability to overbuild in the Seattle metro area.
Currently, this means Miami, with a ratio of three homes on the market for each buyer, faces a far more pronounced surplus compared to Seattle, which sits at just 10%.
While overproduction poses challenges for builders who risk financial losses, it can benefit potential home buyers.
In today’s market, with many homeowners opting to stay put because they secured low interest rates, newly constructed homes and apartments are becoming increasingly essential for accommodating new buyers.
Fairweather anticipates significant drops in home prices in those cities with the greatest housing surplus, like Miami.
In contrast, Seattle’s smaller inventory surplus may lead to a more modest decline in property prices.
Encouragingly, the state is easing regulations to boost housing availability in Seattle.
Recent updates to the city’s comprehensive plan now permit more units—between four to six residences—on each residential lot.
This movement is consistent across other Washington cities, such as Spokane and Vancouver, pushing for greater housing density.
Interestingly, despite the high cost of living in Seattle, the city remains a desirable destination for those relocating.
According to Fairweather, San Francisco residents are the largest group moving to Seattle, as they find even the costly Seattle market a relatively affordable alternative to their own housing market.
As the housing landscape shifts in multiple regions, Seattle’s careful planning and geographic constraints have allowed it to maintain a degree of resilience amidst broader market fluctuations.
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