For the past six and a half years, shares of Amazon have skyrocketed 900% on the New York Stock Exchange. Housing prices in Amazon’s home city of Seattle have almost doubled in this same time period, according to Case-Shiller.
Poof. Amazon stock dropped approximately 20% during the week of September 4, 2018. That drop is already reflected in Seattle’s housing market. In fact, housing prices were already -1.6% down in August for the second straight month, the biggest drop since February 2011, again according to Case-Shiller.
Daryl Fairweather, chief economist with Redfin, said, “There’s been a lot of money in Seattle going into housing but over the last couple of months, the Amazon stock price has gone down, so if that continues, that would have a negative impact on the Seattle housing market. This could be temporary or this could be long term. It’s kind of like a piggy bank.”
Seattle properties are now selling for original asking prices and staying on the market longer despite inventory supplies remaining low. “Just knowing that the list price is what you can actually buy the house for is a big shift,” said Sol Villarreal, an agent with Windemere Real Estate Company who specializes in working with first time buyers. “This reality of knowing that the list price is the “real” price removes the uncertainty of a ‘multiple offer market’ for first-time buyers for the first time in a long time.”
Price growth is also slowing in Denver and Baltimore as well, according to Skylar Olsen, director of economic research and outreach for the Zillow Group. “In many ways, we’re so used to things moving so fast that we forget that housing markets are supposed to be stable…” We’ve also forgotten that Wall Street prices have historically been more stable than what we’ve seen in the last 18 months.
Olsen continued. “These are long-term financial decisions. They should move more slowly.”