Buyers: Keep Your Head Down, This May be Your Time

The first five months of 2017 have been a grind for buyers in our area. Inventory has been quite limited and demand has been off the charts. However, in the month of May we started to see things loosen up, with the highest rate of new listings coming to market in some time. Below are two market samplings from the Greater Seattle area: north King County and south Snohomish County which are reflective of our entire market.

 

South Snohomish County:
In May we saw just over 1,000 new listings come to market in south Snohomish County; the highest inventory push in one given month in over five years! In fact, it was a 46% increase over the previous month, and a 17% increase from the same month a year ago. This is good news for buyers, finally! One should note, however, that pending sales nearly mirrored the number of new listings, illustrating that demand is still very strong.
I think we will see that opportunities have loosened up for buyers in the list-to-sale price ratios that will post in June closings (May pendings). My prediction is that they will have tempered a bit from the 103% posting in May, purely based on buyers having more selection.
Demand surely met the new surge of inventory, but from what I am observing in the market, not all homes are getting multiple offers. When there are multiple offers, smaller groups of buyers may be vying for one house. We have even seen more price reductions in May with overzealous sellers not paying close attention these slight shifts in the market.
Don’t get me wrong, the good houses that are well-priced and looking good are seeing great price escalation and competition, but some are simply selling with a one-buyer audience. There are just more opportunities when there is more inventory, and this is good news for all of us as tempered price growth is needed after a 51% increase in median price over the last four years.

 

North King County:
In May, we saw just over 800 new listings come to market in north King County; the highest inventory push in one given month in over three years! In fact, it was a 33% increase over the previous month and a 9% increase from the same month a year ago. Pending sales also met demand here, but more buyers were able to land a home, which is good news. List-to-sale price ratios recorded at an average of 107% in this area, so definitely a needed tempering as we head into June.
When you are closer to jobs centers demand is higher, so the in-city market will continue to present a hustle for buyers, but more listings will equal a better chance of landing a house close to work. Prices in this area have increased 60% over the last four years.

 

Interest Rates: 
Currently, interest rates are a buyer’s dream come true! We started the year at 4.25%, bumped up to 4.375% in early spring, and we have inched down to 4% most recently. This reduction in rate is saving buyers thousands of dollars over the course of their mortgage on their monthly payments, somewhat offsetting the increase in prices since the first of the year. This is something to pay attention to, and could not come at a better time as it is coupled with more inventory. Inventory in June and July should continue to be strong as the long winter delayed folks getting to market, and many sellers are taking advantage of the prices.

 

If you have thought about making a move or even your first purchase, now may be the time to not just dip your toe in the pool, but to jump in. It is summer and who doesn’t like a nice swim? Especially if that pool has more homes than we’ve seen in some time and cheap money. If you or anyone you know is interested in learning more about our market please contact one of our agents, as it is our goal to keep our clients informed and empower strong decisions.

 

Posted on June 28, 2017 at 3:12 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , ,

Does it Make More Sense to Rent… or Own?

break-even horizon seattle

*The amount of time you need to own your home in order for owning to be a superior financial decision.

 

With Seattle’s robust job market and high housing costs, there has been a lot of talk lately about the cost of living in the Greater Seattle area. In fact, Seattle is now the 5th most expensive city to rent in the country according to a new study from Nested.com. The average monthly rental price for a one bedroom apartment in the city of Seattle is $1,790 according to Zumper.com, up 8.5% year-over-year; and a two bedroom is $2,470, up 6% year-over-year! With rising rental rates, still historically low interest rates, and home prices on the rise, the advantage of buying versus renting has become clear for folks who have a down payment saved, good debt-to-income ratios and strong credit. Currently, the breakeven horizon (the amount of time you need to own your home in order for owning to be a superior financial decision vs. renting) in the Greater Seattle area is 2.4 years according to Zillow research.

An additional study by Nested.com outlines the monthly rental costs for a single person or a family of four, as well as the yearly income required. In Seattle, it costs the average single person $1,288.76 a month to rent, which requires an annual income of $53,328.00. The average family of four costs $2,665.34 for monthly rent, and an annual income of $101,186.48. That is a lot of money one would be paying towards someone else’s investment.

There are several factors to consider that will lead you to make the best decision for your lifestyle and your financial bottom line. One of the biggest factors is interest rates! Currently, the rate for a 30-year fixed, conventional, conforming loan is hovering around 4.25%. That is amazingly and historically low, making the advantage of securing a mortgage huge. What is nice about having a mortgage is that the payment stays the same over the term of the loan. With renting, rates can be increased at any time, and you are paying down someone else’s asset, not your own. Owning gives the homeowner control over their overhead while getting to make their house their home. What is also so great about owning, is that once you have hit the breakeven horizon, every month that ticks away thereafter is building your nest egg in value. The long-term benefits of owning are abundant, including the stability of not being asked to move. These are important factors to consider for everyone, but especially the younger folks who are enjoying the benefits of Seattle’s attractive job market.

Where folks are having to compromise most due to affordability is commute times, and settling in less urban neighborhoods. Worth pointing out, is the average home price in South Snohomish County is 46% less than Seattle Metro – that is a huge savings! Some people, mainly millennials, have not been willing to give up living in the more core urban neighborhoods that have high walk scores and shorter commute times. That should be apt to change as rents are rising fastest in those areas. The advantages of moving out a little further and securing a home will start people on the track of building long term wealth.

If you or anyone you know is currently renting and is considering a change, please let us know as we would be happy to get their questions answered to help them make an informed decision.

 

Posted on March 23, 2017 at 10:32 am
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , ,

Demand is High, Inventory Low… Here we Go!

The two graphs here illustrate the amount of homes for sale, the amount of homes that sold, pending sales and new listings over the past two years in King and Snohomish Counties. This gives us a good look at the simple principle of supply and demand. We are currently experiencing one of the strongest Seller’s markets in recent history. A Seller’s market is defined by having three or less months of available inventory. Currently, King and Snohomish counties have only 0.9 months of inventory based on pending sales. This means that if no new homes came to market, we would be sold out of homes in less than a month. What is crazy is that this inventory count is down 30% from the year prior, which was also an extreme Seller’s market!

Snohomish County Stats February 2017Where this particular Seller’s market is unique, is that a decrease in new listings is not creating this environment, but very high buyer demand is. In fact, King County new listings were up 5% over the last year, but so were sales. In Snohomish County new listings were up 7% over last year, but sales were up 11%! Despite the increase in homes coming to market, demand has matched or outpaced, leaving us with the lowest inventory levels ever.

We can thank our local, thriving job market. So much so, that many people from out-of-state are relocating here to be a part of our economy and the quality of life the Greater Seattle area has to offer. We also have poised move-up buyers ready to cash in on their equity and first-timers ready for action. Combine the healthy local economy with strong equity levels and still historically low interest rates, and the audience for homes that come to market is huge!

Multiple offers are very common and prices are increasing. Median price is up complete year over year in King County by 13% and Snohomish County by 10%. This growth in equity has provided home owners the option to make the moves they have been waiting for, such as a move-up, right-size or relocating out of the area for retirement.

These graphs predict that we will see an increase in new listings as we head into the Spring and Summer months, which is needed to meet demand. If you are considering putting your home on the market this year I would advise the sooner the better, as buyers did not hibernate for the winter and will not be worried about flowers blooming in your front yard. Sellers that beat the second quarter increase in listings will enjoy a larger audience due to less competition.

King County Stats February 2017The importance of both buyers and sellers aligning with a knowledgeable, well-researched and responsive broker is paramount. One might think that it is “easy” to sell a house in this market, but how the preparation, exposure, marketing, management of all the communication and negotiations are handled can make or break a seller’s net return on the sale. While market times are short, they are intense! Negotiations are starting as soon as the property hits the market by educating buyers and their brokers on exactly what a seller would like by the time offers are due. The goal is to bring the sellers I work with not only the highest price, but the best-termed offer that I know is going to close.

If you’re a buyer, it is overwhelmingly important that you are aligned with an agent that knows how to win in this market. Terms, negotiations, financial preparation, communication, responsiveness and market knowledge are what set a highly capable selling agent apart, and are required to prevail. While the market for buyers is fierce, we can assure you that with a well thought out and executed plan, we have helped buyers win.

If you have any curiosities or questions regarding the value of your current home or purchase opportunities in today’s market, please contact us. It is my goal to help keep you informed and empower strong decisions.

 

Posted on March 1, 2017 at 11:15 am
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , ,

Affordability: Commute Times & Interest Rates

windermere.north.snohomish.countyThese graphs illustrate the brass tacks of affordability between King and Snohomish Counties, measured by the average monthly payment. Most recently in September, the average monthly payment was 35% higher in King County compared to Snohomish County. What is fascinating, though, is comparing today’s average monthly payment to peak monthly payments back in 2007! In King County, monthly payments are currently 21% less than during the peak, and in Snohomish County, 36% less. That is a lot of saved monthly overhead. Note that this has everything to do with today’s historical interest rates, as average prices are higher now than in 2007. When one buys or refinances a house, they are not only securing the property, but securing the rate for the life of the loan.

 

Close proximity to the work place and affordability is often near the top of a buyer’s list of preferred features. 2016 has continued to be a year when commute times to major job centers widened the price divide between key market areas in the greater Seattle area. Over the last 12 months, the average sales price for a single-family residential home in the Seattle Metro area was $696,000! In south Snohomish County (Everett to the King County line), the average sales price for a single-family residential home was $471,000 – 48% less than Seattle Metro. Further, if you jump across Lake Washington to the Eastside, the average sales price for a single-family residential home was $881,000 – 27% more than Seattle Metro!

windermere.north.king.county

 

The “drive to qualify” mentality has been proven by the pending sales rate in south Snohomish County over the last 12 months. Pending sales are up 7% complete year-over-year, whereas in Seattle Metro pending sales are down 1%, and down 2% on the Eastside. We believe this is a result of affordability, more inventory choices in south Snohomish County, new construction options, lower taxes, strong school district choices, and manageable commute times. Newer transit centers and telecommuting have also opened up doors to King County’s little brother to the north as well. If you are curious about possible commute times, you can search for properties on our website based on commutes times, which is a feature provided by INRIX Drive Time. Also, we track the market in several ways, so if the graphs here are interesting to you, any of our agents would be happy to provide additional information relative to your specific neighborhood. Please contact us anytime, as it is our goal to help keep you informed and empower you to make strong real estate decisions.

 

Posted on October 31, 2016 at 4:48 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , , , , , , ,

Many Factors to Consider When Choosing to Rent vs. Own

rent v own
*The amount of time you need to own your home in order for owning to be a superior financial decision.

There has been a lot of talk lately about the cost of living in the Greater Seattle area. Whether it has to do with home prices or rental rates the story is the same: it is becoming more and more expensive by the month. With rising rental rates, historically low interest rates, and home prices on the rise, the advantage of buying vs. renting has become clear for folks that have a down payment saved, good debt to income ratios and strong credit. In fact, Seattle is now the 10th most expensive city to rent in the country according to a new study from Zumper.com. The average monthly rental price for a one-bedroom apartment in the city of Seattle is $1,740! Snohomish County has seen an increase in apartment growth and rising rental rates as well. Currently, the breakeven horizon in the Greater Seattle area (the amount of time you need to own your home in order for owning to be a superior financial decision versus renting) is 1.6 years according to Zillow research. 

There are several factors to consider that will lead you to make the best decision for your lifestyle and your financial bottom line. One of the biggest factors is interest rates! Currently, the rate for a 30-year fixed, conventional, conforming loan is hovering around 3.5%. That is amazingly and historically low, making the advantage of securing a mortgage huge. What is nice about having a mortgage is that the payment stays the same over the term of the loan. With renting, rates can be increased at any time, and you are paying down someone else's asset, not your own. Owning gives the homeowner control over their overhead while getting to make their house their home. What is also so great about owning is that once you have hit the breakeven horizon, every month that ticks away thereafter is building your nest egg in value. Did you know that American homeowners’ net worth is 36 times the amount of renters? The long term benefits of owning are abundant. These are important factors to consider for everyone, but especially the younger folks that are enjoying the benefits of Seattle’s attractive job market and competitive wages.

Where folks are having to compromise most due to affordability is commute times and settling in less urban neighborhoods. Some people, mainly millennials, have not been willing to give up living in the more core urban neighborhoods that have high walk scores and shorter commute times. That should be apt to change as rents are rising fastest in those areas. The advantages of moving out a little further and securing a home will start people on the track of building long term wealth. If you or anyone you know is currently renting and is considering a change, please let us know, as we would be happy to get your questions answered to help you make an informed decision.

 

Posted on July 26, 2016 at 4:49 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , , ,

A Thirteen-Year Overview of Inventory Levels- Where’s the Balance?

The two graphs here illustrate a thirteen-year overview of inventory levels in both King and Snohomish Counties, highlighting the 2007 crash. Inventory levels are measured by the months of available inventory. For example, if there were 60 homes available in July and 30 homes sold in July, you would be left with two months of inventory; meaning that if no new homes came to market, the demand of 30 homes per month would absorb the 60 available homes in two months. A buyer's market is defined by 6+ months of inventory, a balanced market, 3-6 months and a seller's market, 0-3 months. From March to June of this year we averaged 1.1 months of inventory in King County and 1.2 months in Snohomish County, both extreme seller's markets.  

june graphs2In King County over the last 13 years we saw three years of a buyer's market, which happened during the biggest economic downturn since the Great Depression, after the crash of the housing market in 2007. This economic fallout was a result of predatory lending practices, which created a large population of buyers who were not truly qualified to purchase a home. This oversaturated the market and then led it to its crash when those lending practices were shut down. These severe influences on the market led to quick jumps from a seller's to a buyer's market and then a buyer's to a seller's market. It only took one short year to transition from the seller's market of 2004-2006 to the three-year long buyer's market after the housing crash. Once the sub-prime lending options were shut down in July 2007, it eliminated many buyers, creating an extreme buyer's market. It also only took one short year to transition out of the downturn and back to a seller's market as the economy started to recover. It has been a seller's market in King County since May of 2012 – four years!

In Snohomish County over the last 13 years we saw four years of a buyer's market. Snohomish County was hit a bit harder by the Great Recession than our neighbor to the south, as it took longer to recover. It has been a seller's market in Snohomish County since May of 2012, except for one quarter of a balanced market in the beginning of 2014, when we saw a surge of new construction come to market due to the national builders releasing some neighborhoods they had acquired in the downturn.  

Interestingly, the market shifts were brief because the downturn was so severe, which changed the market environment quickly. In order to clean up the predatory lending mistakes of 2004-2007, the market essentially had to come to a standstill and flush out all of the bad loans via foreclosure and short sales, which took five years. The only time we found ourselves in such an extreme buyer's market, was after one of the biggest economic fallouts of the last century. Once that corrected itself we quickly returned to a seller's market due to many positive factors. 

Our available housing stock is affected by the limited land left to build on, a thriving job sector (especially in tech), historically low interest rates and the Greater Seattle area being a nice place to live. All four of these indicators have shrunk inventory and put upward pressure on prices. Sellers continue to enjoy great market returns, and buyers continue to fight to secure a home with a 4% interest rate, and not too far from their workplace. Additional inventory would be more than welcomed, it is very clear that we have the demand to absorb it. If you are curious about the value of your home in today's market or securing a purchase please contact one of our agents. We are always happy to help educate you on how this market can benefit your bottom line. 

Posted on June 24, 2016 at 4:51 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , ,

Market Update – Q1 2016

The 2016 real estate market is off to an extreme start! Strong buyer demand due to our flourishing job market and historically low interest rates are the driving force behind this market. Buyers often find themselves competing due to multiple offers which require seller-centric terms in order to win. Prices have continued to grow over the last two years, putting sellers in a very favorable equity position, freeing them up to make the moves they have been waiting for. Additional inventory would help slow price growth and make it less competitive for buyers, creating positive outcomes for everyone. Lending requirements remain stringent, unlike the past “up” market which created the bubble we experienced in 2008.

Scroll down for more details about the first quarter market in Snohomish County, south Snohomish County, north King County, the Eastside, Seattle Metro and south King County.

Snohomish County
More inventory is needed to quench buyer demand as we head into spring and summer.

Sno Co

 

Snohomish County ended 2015 with a larger-than-seasonally-normal surge of closed sales, leaving us with only 1.4 months of inventory based on pending sales to start the year, which is not much! The first quarter saw a frenzy of buyer activity but only a small trickle of new inventory, leaving us with only 0.8 months of inventory heading into the second quarter. This has caused days on market to shrink and list-to-sale price ratios to rise. These conditions are very favorable to sellers. In fact, average and median prices were up 5% and 4% respectively in March over February! The good news is that new listings were up 25% in that same time frame. We hope to see that trend continue as we head into spring as the buyer demand is there to absorb it and it is needed to slow price growth.

 

 

 

South Snohomish County
More inventory is needed to quench buyer demand as we head into spring and summer.

South Sno

 

South Snohomish County ended 2015 with a larger-than-seasonally-normal surge of closed sales, leaving us with only 1.2 months of inventory based on pending sales to start the year, which is not much! The first quarter saw a frenzy of buyer activity but only a small trickle of new inventory, leaving us with only 0.7 months of inventory heading into the second quarter. This has caused days on market to shrink and list-to-sale price ratios to rise. These conditions are very favorable to sellers. In fact, average and median prices were up 5% in March over February! The good news is that new listings were up 27% in that same time frame. We hope to see that trend continue as we head into spring as the buyer demand is there to absorb it and it is needed to slow price growth.

 

 

 

North King County
More inventory is needed to quench buyer demand as we head into spring and summer.

North King

 

North King County ended 2015 with a larger-than-seasonally-normal surge of closed sales, leaving us with only 1.1 months of inventory based on pending sales to start the year, which is not much! The first quarter saw a frenzy of buyer activity but only a small trickle of new inventory, leaving us with only 0.6 months of inventory heading into the second quarter. This has caused days on market to shrink and list-to-sale price ratios to rise. These conditions are very favorable to sellers. In fact, the average price was up 2% in March over February! The good news is that new listings were up 49% in that same time frame. We hope to see that trend continue as we head into spring as the buyer demand is there to absorb it and it is needed to slow price growth.

 

 

 

Eastside
More inventory is needed to quench buyer demand as we head into spring and summer.

Eastside

 

The Eastside ended 2015 with a larger-than-seasonally-normal surge of closed sales, leaving us with only 1.3 months of inventory based on pending sales to start the year, which is not much! The first quarter saw a frenzy of buyer activity but only a small trickle of new inventory, leaving us with only 0.9 months of inventory heading into the second quarter. This has caused days on market to shrink and list-to-sale price ratios to rise. These conditions are very favorable to sellers. In fact, average and median prices were up 4% in March over February! The good news is that new listings were up 43% in that same time frame. We hope to see that trend continue as we head into spring as the buyer demand is there to absorb it and it is needed to slow price growth.

 

 

 

Seattle Metro
More inventory is needed to quench buyer demand as we head into spring and summer.

Metro

 

The Seattle Metro area ended 2015 with a larger-than-seasonally-normal surge of closed sales, leaving us with only 1.1 months of inventory based on pending sales to start the year, which is not much! The first quarter saw a frenzy of buyer activity but only a small trickle of new inventory, leaving us with only 0.6 months of inventory heading into the second quarter. This has caused days on market to shrink and list-to-sale price ratios to rise. These conditions are very favorable to sellers. In fact, average and median prices were up 3% in March over February! The good news is that new listings were up 47% in that same time frame. We hope to see that trend continue as we head into spring as the buyer demand is there to absorb it and it is needed to slow price growth.

 

 

 

South King County
More inventory is needed to quench buyer demand as we head into spring and summer.

South King

 

South King County ended 2015 with a larger-than-seasonally-normal surge of closed sales, leaving us with only 1.4 months of inventory based on pending sales to start the year, which is not much! The first quarter saw a frenzy of buyer activity but only a small trickle of new inventory, leaving us with only 0.8 months of inventory heading into the second quarter. This has caused days on market to shrink and list-to-sale price ratios to rise. These conditions are very favorable to sellers. In fact, average and median prices were up 6% and 3% respectively in March over February! The good news is that new listings were up 39% in that same time frame. We hope to see that trend continue as we head into spring, as the buyer demand is there to absorb it and it is needed to slow price growth.

 

 

 

 

This is only snapshots of the trends in our area. Please contact one of our agents if you would like further explanation of how the latest trends relate to you.

 

Posted on May 3, 2016 at 12:01 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , ,

Strategy is Key in an Extreme Market

Snohomish County King County Real EstateThe beginning of 2016 has been quite the ride so far in our local real estate market. It has been the most extreme seller's market we've ever seen. At the end of February, both King and Snohomish Counties ended the month with only one month of inventory based on pending sales. Pending numbers (the amount of homes going under contract) were up 35% in King County from the previous month and up 24% in Snohomish over the previous month. Demand is strong!  How we manage that demand is critical. Every type of market calls upon different skills to achieve the best outcome for our clients. In this extreme seller's market the strategy one creates for their sellers to gain the best possible outcome is a fine-tuned, high-effort approach. 

First, market research and price positioning not only takes studying the history of the market, but anticipating what is next, so no opportunities are missed. Second, properly bringing the home to market is still paramount. Even though there are less homes to choose from in this market, how a home "shows up" could make a difference of thousands of dollars in return for a seller. An investment in professional photography, staging and marketing only adds to the exposure, increasing interest from the buying public. Third, managing the demand – this is huge! This is where communication and being the calm in the storm is key. It is always our goal to harness control and bring calm during the intense initial market time. It is not our goal to take the first offer that comes our seller's way. Instead it is our goal to massage what the home has to offer over a set period of time in order to garner a great price for our Sellers, but also superior terms, such as waived contingencies. Fourth, it is our goal to end with a contract that has a great price, but also one that will make it to the closing table. There are obstacles in this accelerating market, such as passing appraisal, which we anticipate up front to insure a smooth journey through closing.

Windermere North LynnwoodBy completing extensive market research, studying upcoming trends, highlighting a property's features with superior marketing, executing a strategy to manage the demand and negotiating the best terms for our sellers, we are creating above market-average results! In the first two months of 2016, the average cumulative days on market in King County was 40.5 days and Snohomish County was 50.5. My office averaged 23 days and 25 days respectively. In those same two months the list to sale price ratio in King County was 100.5% and 99.5% in Snohomish County. My office averaged 101.2% and 103.1% respectively. Saved market time and higher price acceleration is resulting in a better bottom line for our clients.

These results do not come without a refined, strategic approach. Understanding the nuances that each market brings equals results in the best interest of our clients. If you or any one you know is contemplating participating in this extreme seller's market please contact one of our agents. It would be our honor to have the opportunity to help create and navigate a successful strategy resulting in a win.

 

 

Posted on March 22, 2016 at 4:25 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , ,