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.
We’re more than halfway through 2017! That means it’s time to reflect on national housing market predictions from the beginning of the year and look ahead to what we can expect for the remainder of the year. As a reminder, in early 2017 experts anticipated price growth would slow, inventory would bottom, and mortgage rates would climb. According to Forbes, here are five things we can look out for: Continued low inventory. Low inventory has been synonymous with our local market for a while, so this quote from one expert probably hits close to home for many people in the Seattle area: “I think we are OK calling it a straight up inventory crisis at this point.” According to an analysis, the current number of homes for sale is about equal to the housing supply in 1994 even though the U.S. population has grown by 63 million people since then. More demand and higher prices. To follow the last point, since supply cannot fulfill demand, national home prices were up 5.58 percent through May. The current administration’s policies that could boost demand and millennial home buyers mean demand is not expected to dissipate anytime soon. Lack of affordable housing. While the median value of homes in the U.S. is a relatively affordable $200,000, the median home sold for $263,800 in June. These prices are different (i.e. significantly lower) than what we typically see in our local market, but it is also common for us to see homes sell way over list price. Homes will move fast. This is the effect of low inventory and high demand. The good news is there are still homes for sale. The not so good news is they go quickly. Nationally, the share of homes still on the market two months after listing is 47 percent. Again, these numbers are different for our region but the phenomenon of homes being snatched up quickly is the same. Low mortgage rates. Here’s some good news! The average rate of the 30-year fixed mortgage is below the roughly 4 percent rate seen at the start of the year and at the low end of the range of economists’ forecast for the end of the year. We owe this to investor confidence in the U.S. government. Contact me with questions about how I can help you better understand and navigate our ever-changing housing market!
Instead of experiencing the typical summer seasonal slowdown, the real estate market in July was as hot as the weather. For yet another month, our area had the distinction of seeing home prices rise faster than any other market in the country. Buyers were hit with a double whammy – soaring prices and the continuing lack of inventory. Despite the rising prices, most homes are selling in about a week. Brokers are hoping to see the return to a more balanced market soon. Eastside While down from its record in June, the median price of a single-family home on the Eastside soared 15 percent from a year ago to a $860,000. The median price in West Bellevue was $2.3 million, making it the most expensive area in King County. Even at that price point, competition is steep. Of the 71 homes that sold in West Bellevue in July, 40 percent sold in a week or less. King County For the first time, the median home price in King County grew more than $100,000 in a year. That translated into a median home price of $658,000, a whopping 19 percent increase over the same time last year, and another new high. Tight inventory was a big contributor. There were 18 percent fewer homes for sale than last July. Seattle With just two weeks of inventory, the supply of homes of homes for sale in Seattle just can’t keep up with demand from new residents to live close to the city. In the desirable, close-in Ballard neighborhood, there are currently only 17 single-family homes on the market. Prices are up accordingly. The median price for a single-family home in Seattle increased 15 percent over a year ago to $748,500, essentially unchanged from the peak in June. Snohomish County While still a relative bargain when compared to King County, Snohomish County has been playing catch-up. Prices have regularly increased by double digits over the previous year. July was no exception. The median price of a single-family home jumped 12 percent over the same time last year to $453,000, another record high.
The Eastside Market Review is now available for the second quarter of 2017. You can read the full report online by clicking the image below.
ECONOMIC OVERVIEW The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017. Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976. I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity. HOME SALES ACTIVITY There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016. Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County. The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago. The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017. HOME PRICES Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187. Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages. When compared to the same period a year ago, price growth was most pronounced […]
It was another month of record-setting home prices in June as the area yet again took the prize for the hottest real estate market in the country. In a bright spot for buyers, the number of new listings added in June was the highest total for any single month since May 2008. While inventory is still low, the pace of sales is slowing and the number of multiple offers are down, suggesting that we may soon see a slight reprieve from the last year of rapid-fire growth. Eastside The median price of a single-family home on the Eastside soared 19 percent from a year ago to a new record-high of $885,000. Despite that increase, multiple offers—while down—are still common. With most buyers presenting offers on multiple properties before purchasing a home, working with a broker to create a strong strategic plan, clear negotiating parameters, and a streamlined offer are critical for success. King County The median price of a single-family home in King County climbed 14 percent over a year ago to a new record of $653,000. Inventory remains extremely tight, and homes are selling very quickly. According to a broker analysis, 80-to-90 percent of sellers in the Puget Sound area are accepting offers on their homes within 30 days of listing. In hot neighborhoods, that number can be just a few days. Seattle Seattle home prices are rising at the fastest rate in nation. U.S. Census data shows Seattle is gaining about 1,100 residents week. With supply unable to keep up with soaring demand, prices just keep climbing. The median price for a single-family home in Seattle jumped 13 percent over a year ago to $750,000. The increase in the number of $1 million-plus homes in the city was among the highest in the country. Snohomish County Buyers looking to get more home for their dollar continue to make the move north to Snohomish County. Demand is so high that new construction homes are selling before they’re built, with many new homes not even hitting the market. The median price of a single-family home sold in June increased 14 percent over the same time last year to $450,000, unchanged from last month’s record high.