2017 closed out the year with historically low inventory and record-breaking price gains. A strong local economy and brisk population growth has helped fuel a steep discrepancy between supply and demand. As long as this imbalance remains, 2018 is on track to remain a very strong seller’s market. Eastside >Click image to view full report. Defying the usual winter slow-down in home prices, December broke new records on the Eastside. The median price of a single-family home soared 17 percent over a year ago to $938,240 – an all-time high for the region. Appreciation in higher-end areas, like West Bellevue and Mercer Island, topped 20 percent. Homeowners, especially those considering downsizing, may want to take advantage of the sharp increase in equity. King County >Click image to view full report. King County recorded the lowest inventory since records began in 2000, and demand just keeps rising. As a result, the price of a single-family home jumped 15.5 percent over the same time last year to $635,000. Those looking buy a condo as a more affordable option were out of luck. The median price tag of $402,000 is a relative bargain when compared to a single-family home, but there are only about 200 condos on the market, another record low. Seattle >Click image to view full report. While below the high point last summer, the median price of a home in Seattle jumped 14 percent year over year to $725,000. Supply and demand is again the culprit. There are just two weeks of available inventory on the market. Not only are homes here selling quickly, but fewer people are putting their homes up for sale. Most economists are predicting a moderate slowdown in cost increases here in 2018, with prices still rising but not as sharply as they did in 2017. Snohomish County >Click image to view full report. Prices in Snohomish County continue to rise at a rapid pace. The median price of a single-family home here grew 12.5 percent from a year ago to $449,950. With less than a month of available inventory, prices are projected to remain high.
It looks like we’re skipping the normal holiday slowdown this season with brokers reporting crowded open houses and competitive bidding in many areas. However, since sellers who list their homes at this time of the year are usually motivated to move soon, the holidays are still a good time to buy. Some of the best pricing is historically found between December and February. Eastside The rate of appreciation for homes on the Eastside continues to be as robust – or more so – as in Seattle. Both local and international buyers attribute the appeal of the area to larger lot sizes, newer construction, and highly-rated school districts. Inventory here is extremely low, and homes are selling quickly. The median price for a single-family home on the Eastside reached $851,000 in November, a 12 percent increase over the same time last year. King County The number of new listings in King County is down 19 percent as compared to a year ago. With demand still strong, the median home price in King County rose 15 percent over last year to $630,750. Condo inventory, long an option for more affordable housing, is at a record low as developers opt for building apartments to avoid the legal and financial risks that come with building condos. Seattle Seattle is one of the fastest growing American cities, and demand doesn’t look to be slowing any time soon. Combine that with a very limited supply and it’s no surprise that for over a year home prices here have been rising faster than anywhere in the country. Last month, the median price for a single-family home in Seattle was $741,000, soaring 21 percent from the previous year. Snohomish County Buyers priced out of the King County market are taking this advice: drive until you qualify. Many are ending up buying in Snohomish County. The number of homes for sale was down more than 24 percent here in November and there is currently less than one month of inventory available. The median price of a single-family home was $445,000, up 11 percent year-over-year.
Your kids have moved out and now you’re living in a big house with way more space than you need. You have two choices – remodel your existing home or move. Here are some things to consider about each option. Choice No. 1: Remodel your existing home to better fit your current needs. Remodeling gives you lots of options, but some choices can reduce the value of your home. You can combine two bedrooms into a master suite or change another bedroom into a spa area. But reducing the number of bedrooms can dramatically decrease the value of your house when you go to sell, making it much less desirable to a typical buyer with a family. The ROI on remodeling is generally poor. You should remodel because it’s something that makes your home more appealing for you, not because you want to increase the value of your home. According to a recent study, on average you’ll recoup just 64 percent of a remodeling project’s investment when you go to sell. Remodeling is stressful. Living in a construction zone is no fun, and an extensive remodel may mean that you have to move out of your home for a while. Staying on budget is also challenging. Remodels often end up taking much more time and much more money than homeowners expect. Choice No. 2: Sell your existing home and buy your empty nest dream home. You can downsize to a single-level residence and upsize your lifestyle. Many people planning for their later years prefer a home that is all on one level and has less square footage. But downsizing doesn’t mean scrimping. You may be able to funnel the proceeds of the sale of your existing home into a great view or high-end amenities. A “lock-and-leave” home offers more freedom. As your time becomes more flexible, you may want to travel more. Or maybe you’d like to spend winters in a sunnier climate. You may want to trade your existing home for the security and low maintenance of condominium living. There has never been a better time to sell. Our area is one of the top in the country for sellers to get the greatest return on investment. Real estate is cyclical, so the current boom is bound to moderate at some point. If you’re thinking about selling, take advantage of this strong seller’s market and do it now. Bottom […]
Prices in our area have now been rising faster than anywhere in the country for twelve months. Sellers seem to be getting the message that now is a good time to put their home on the market. There was an increase in new inventory in October, but with homes selling rapidly, there still aren’t enough properties to meet demand. As a result, counties throughout the Puget Sound area saw year-over-year price increases in the double digits. Snohomish County The median price of a single-family home in Snohomish County in October was $440,000, an increase of 14 percent over the prior year. The market here may be moderating slightly. Brokers note that while multiple offers are continuing, listings are experiencing longer market times and fewer above-list price offers. Eastside The median price for a single-family home on the Eastside rose 10 percent from a year ago to $845,000. Homes in West Bellevue hit a new record median price of $2.6 million. Despite soaring prices, demand has remained strong in this desirable area. And the continued robust economy makes it unlikely that home prices here will cool any time soon. King County The number of new listings in King County increased at the highest rate in more than a year. But, they were grabbed up quickly, with most homes selling in well under 30 days. The shortage of homes for sale propelled prices up, with the median home price in King County jumping 15 percent over the same time last year to $630,000. Seattle Seattle remains the hottest real estate market in the country, with prices rising here at more than double the national rate. Rents in Seattle are also rising faster than almost anywhere else in the country, pushing more people into the home buying market. High demand and slim supply helped boost the median price of a single-family home nearly 18 percent to $735,000.
Economic Overview The Washington State economy added 79,600 new jobs over the past 12 months—an impressive growth rate of 2.4%, and well above the national growth rate of 1.2%. However, as we anticipated in last quarter’s report, we continue to see a modest slowdown in the growth rate as the state grows closer to full employment. Growth has been broad-based, with expansion in all major job sectors other than Aerospace (a function of a slowdown at Boeing). Given the current rate of expansion, I am raising my employment forecast and now predict that Washington will add 81,000 new jobs in 2017. Given the robust job market, it is unsurprising that the state unemployment rate continues to fall. The current unemployment rate in Washington State is 4.6% and we are essentially at full employment. Additionally, all counties contained within this report reported either a drop or stability in their unemployment rate from a year ago. I maintain my belief that the Washington State economy will continue to outperform the U.S. as a whole. Given such a strong expansion, we should also expect solid income growth across Western Washington. Home Sales Activity There were 25,312 home sales during the third quarter of 2017. This is an increase of 3.6% over the same period in 2016. Clallam County maintains its number one position for sales growth over the past 12 months. Only four other counties saw double-digit gains in sales. This demonstrates continuing issues with the low supply of listings. There were modest declines in sales activity in six counties. The market remains remarkably tight with listing inventory down by 14.2% when compared to the third quarter of 2016. But inventory is up a significant 32% compared to the second quarter of this year. Pending sales rose by 5.2% over the same quarter a year ago, which suggests that closings in Q4 will still be robust. The key takeaway from this data is that inventory is still very low, and the situation is unlikely to improve through the balance of the year. Home Prices Given tight supply levels, it is unsurprising to see very solid price growth across the Western Washington counties. Year-over-year, average prices rose 12.3% to $474,184. This is 0.9% higher than seen in the second quarter of this year. With demand far exceeding supply, price growth in Western Washington continues to trend well above the longterm average. As I do […]
The typical seasonal slowdown of new listings in September added to frustration for buyers who are competing for a very limited number of homes. Strong job growth continues to fuel demand. The state added 83,000 new jobs in the month of August, and September looked to be just as robust. The result? King, Pierce and Snohomish counties all reported double-digit price increases from a year earlier. Snohomish County The median price of a single-family home in Snohomish County sold in September was $450,000, a 14 percent increase over the same time last year. With just slightly over one month’s inventory of homes available, it’s unlikely price growth here will slow any time soon. Eastside The median price of a single-family home on the Eastside jumped 14 percent from the same time last year to a $855,000. As the median on the Eastside approaches the $1 million mark, the price tag for a luxury home is increasing. Of all the single-family homes that sold on the Eastside in September nearly 40 percent sold for more than $1 million. In the city of Bellevue, two-thirds of the homes sold for more than $1 million. King County The median price of a single-family home sold in King County in September increased 16 percent from a year ago to $625,000. While down from the record high of $658,000 in July, it represents the highest value for any September since records began in 2000. Among the largest metro areas in the U.S., our region has now led the nation in price increases for the last 11 months. Seattle Seattle’s inventory remains as tight as ever, with homes being snapped up in days. A big hiring push by local employers just keeps adding to the pressure. With supply dwindling and demand soaring, prices had only one place to go – up. In September, the median single-family home price in Seattle soared 15 percent over a year ago to $725,000.
If you’ve been looking to buy a house, it’s easy to get discouraged. With our local real estate market still the hottest in the country, a lot of buyers have become frustrated after losing out to multiple offers and all-cash sales. While some buyers are considering waiting out the market, here is why that’s not a wise move. 1. Historically, this time of the year is the best time to buy a home. The fourth quarter of the year has always seen the lowest demand for home sales. Kids are back in school. The holiday season is gearing up. It’s just not the time of year when people want to uproot their lives and move into a new home. That all changes in a few months. The market traditionally experiences the highest demand and the lowest inventory of the year between January and May. Your best bet is to make an offer now. 2. Home prices are expected to increase next year. A booming economy, rising population, and an influx of highly-paid workers are all expected to sustain the strong demand for housing through 2018. While the sharp home price increases of the past few years are expected to moderate, Windermere Chief Economist Matthew Gardner predicts that home prices will increase by 9 percent next year. 3. Interest rates are predicted to rise. Waiting means you’ll get less house for your money. It’s all about the One in Ten Rule. As Matthew Gardner explains, for every 1 percent increase in mortgage rates your buying power decreases by 10 percent. Even if home prices are flat a year from now (which is not expected), an increase in interest rates means you’ll have to borrow more money to buy the same house. With home valuations at high levels today, buyers should consider three things before they purchase a home: Can I afford the monthly payments, do I like the location, and am I planning to live in the home for at least five years? If you decide to move forward, your real estate agent can make the difference between winning the deal or not. Here’s what sets me apart: I will position your offer to have the greatest appeal to the seller (and sometimes that’s not just a higher price). I receive extensive training on how to create the most competitive offer and negotiate successfully in a multiple-offer situation. Other agents are […]
High demand and low supply made it the market’s hottest August since records began in 2000. Sparse inventory was again the norm, as were multiple offers. However, brokers are cautioning sellers to price their homes correctly. Most buyers have been in the market a long time and are well educated. Overpriced listings are not getting showings or offers. In some rare good news for buyers in this heated market, mortgage lenders are relaxing some standards to make it easier to buy a home. Eastside The median price of a single-family home on the Eastside increased 11 percent from a year ago to a $853,000. That number is down slightly for the second month in a row, but affordability is still a big issue. The share of million-dollar homes here is rising faster than just about anywhere in the country. In Medina, 99.7 percent of homes are worth at least $1 million. On Mercer Island, it’s 88 percent, and 64 percent of West Bellevue homes are worth $1 million or more. King County The local area led the nation in home-price growth for the 10th straight month. In August, the median home price in King County jumped 18 percent over the same time last year to $650,000, off slightly from the record high of $658,000 in July. While inventory is low, the fourth quarter of the year has always seen the lowest demand for home sales. If you’re thinking about buying a home, it is to your advantage to work with your broker and make an offer now. Seattle Inventory-starved Seattle just can’t keep up with the demand of its growing population. Lack of supply helped push the median price for a single-family home to $730,000, an increase of 17 percent over a year ago. That’s down slightly from the peak of $750,000 in June. If sellers need an incentive to put their home on the market, a recent analysis showed Seattle among the top U.S. cities for sellers to get the greatest return on investment. Snohomish County While prices in King County may be showing the first signs of moderating, Snohomish County continues to hit new records for home prices. The median price of a single-family home here jumped 14 percent over the same time last year to $455,000, yet another record high.
Amazon has become a powerhouse for the Seattle area. With its recent acquisitions, record employment, and now massive office space takeover, it seems there is not much this tech company cannot do. According to a new analysis by The Seattle Times, “Amazon now occupies a mind-boggling 19 percent of all prime office space in the city, the most for any employer in a major U.S. city.” To put that into perspective, they occupy more office space than the next 40 biggest employers in the city combined. Their 8.1 million square feet is expected to rise to more than 12 million within five years. From computer power, to retailing, to publishing books and producing films, Amazon continues to support itself and its growth. John Schoettler, Amazon’s director of real estate, says this “steady, continued growth” is all he’s experienced in his nearly two decades at the company. In 2001 when Schoettler told CEO Jeff Bezos they needed a plan, Bezos’ only condition was that Amazon would stay and grow in downtown Seattle. As a conscious decision, “by staying in the urban core, Amazon would attract members of the hip creative class.” And their plan worked very, very well. In fact, Amazon now employs about 40,000 employees in Seattle, up from 5,000 in 2010. They are now the largest employer in the city, and they have plans (and the room) to grow up to 55,000 by 2020. Along with Amazon’s growth comes an increase in mega-commuters – people who drive at least 90 minutes each way to work. In the last five years, those commuters have increased by a shocking 72 percent. Additionally, Windermere Real Estate’s own chief economist Matthew Gardner notes Amazon’s growth has been “so substantial that it can single-handedly skew the city’s core office market.” Many other tech companies are working their way into the Seattle market to recruit some of the same engineering talent that has been flooding to Amazon. Companies like Google, Apple, Facebook, and more are hoping for some of the same success. Read the full article from The Seattle Times for more on Amazon’s retail revitalization, history, and real estate boom.
As home prices in King County have reached record highs, some people are wondering whether we are approaching another housing bubble. While it’s true that home prices here have surpassed the last peak hit during the housing bubble, that doesn’t mean we are in bubble territory today. The last bubble was fueled by faulty mortgage practices. Today, loans are granted on much more sound principles. More importantly, the local economy is flourishing. Seattle has the fastest growing population of any major city in the country. The demand for homes, and historically low inventory, have been the catalyst for rising home prices here. Still not convinced that there is no bubble? Let’s take a look at the statistics. King County Median Sales Price According to data from the Northwest Multiple Listing Service, the median home price in King County rose steadily since 1993 (the first year the NWMLS reported median home figures), fell during the crash, and has risen since 2012. Now, let’s assume there was no housing bubble and crash in the mid-2000s and that home prices appreciated at normal historic levels for King County, which has been an average annual rate of 6 percent for many decades. This graph compares actual home prices (blue bars) with what prices would have been with normal appreciation (orange bars) over the same period. King County Median Sales Price Bottom Line: Had there not been a boom and bust, based on historic appreciation rates home values would be close to where they are right now. However, there is no doubt that home prices have risen rapidly the past few years, and that rate of appreciation can’t be sustained over the long term. If you are considering buying a home today, make sure you can afford the payments, and choose a location that will appeal to you for years to come.