Seattle, Portland, and Las Vegas reported the highest year-over-year gains among the 20 cities. In July, Seattle led the way with a 13.5% year-over-year price increase, followed by Portland with a 7.6% increase, and Las Vegas with a 7.4% increase.
Commenting on the real estate market, Zillow's chief economist Dr. Svenja Gudell noted that the supply of housing -- especially affordable housing -- isn't even close to keeping up with demand:
The U.S. housing market entered a strange kind of twilight zone over the summer, in which home prices kept rising steadily, but actual home sales activity largely leveled off at fairly underwhelming levels. The reason for both is the same: There is a huge shortage of homes actually available to buy relative to the amount of demand from home buyers out there. When the number of homes to buy is low, the number of closed home sales will also be low, and when supply is low, but demand is high, prices inevitably go up. It sets up a situation in which the housing market looks largely healthy from a 50,000-foot view. Jobs are relatively plentiful and wages are growing modestly; affordability – at least on paper – looks good, thanks largely to very low mortgage interest rates; and home prices themselves show no signs of declining any time soon. But on the ground, the situation is much different, especially for younger, first-time buyers and/or buyers of more modest means. Supply is low in general, but half of what is available to buy is priced in the top one-third of the market. This only stiffens competition at the entry and mid-level segments, which pushes prices up faster and actually contributes to quickly worsening affordability for these buyers.
On a related note, you can read our Special Report on Washington's Growth Management Act, and its effects on affordable housing, here.