‘Crushing’: Seattle real estate purchasing power plummet ranked No. 7 in the nation
(The Center Square) – Seattle has made a top ten list that no city wants to be on, of purchasing power lost for real estate transactions.
Coming in at the 7th largest loss of purchasing power nationwide when comparing data between 2021 and 2022, Seattleites are able to spend an average of $165,106 less to purchase a home this year, according to a recent report by Point 2 Homes.
Accompanying that drop in purchasing power, Emerald City homebuyers will receive, on average, 315 fewer square feet of finished home.
This drops the square footage from 1,114 square feet in 2021 to 799 square feet in 2022 for an equivalently affordable home.
The number is equivalent to losing two full bedrooms of livable space.
The report was based on the household median income from each city. It assumes a 20% down payment and a monthly mortgage payment, inclusive of insurance and taxes, that doesn’t represent more than 30% of the median income.
The sales data was then compared across the 2021 and 2022 years accounting for changes in interest rates and purchasing power when considering a 30-year fixed rate mortgage.
“The amount of space the average homebuyer could afford in 2021 and what they can afford right now are two very different things,” the report explains. “When the interest rate was hovering around 3%, the pain of soaring home prices was just a dull ache compared to the major burden it has become. Now, with rates crossing the psychological barrier of 7% (a level not seen in more than two decades) the consequences for homebuyers are crushing.”
