A Love Letter to Buyers

 

We often share the advantages of this market for home sellers, which is unbelievably positive. However we thought it was time to give the potential buyers in our marketplace some love, hope, and of course data!

 

Dear Greater Seattle Home Buyer,

Let’s just be up front: buying a home in today’s market is not easy. Quite frankly, it can be a wild roller coaster ride with twists and turns; but remember, folks pay a lot of money and stand in long lines for roller coaster rides. Imagine the excited pit in your stomach as the cart clicks up to the highest point before you plunge down a steep drop, and the thrill of raising your hands up because you trust that you are going to be okay. These emotions also accurately reflect the feelings of today’s home buyer – it can be a wild ride! Let’s also note that many roller coaster riders return to the back of the line right after getting off. Home ownership is also a good exercise to repeat and is often the investment that leads to the most built wealth in one’s life.

So how does one ensure that they are not the Nervous Nelly who stands in line for over an hour, finally makes it to the front to be strapped in to the cart, but who then chooses to bow out? The one that sits on the sidelines watching others throw up their hands with a thrill in their eye; the one with that tinge of regret as their friends rejoin them back on hallowed ground to recount their adventure. Wow, this is getting dramatic! Here are a few tips to follow that will ensure that one can find success securing a home in today’s market and get on the equity building train.

 

Waiting is Even More Expensive
In 2017, the year-over-year median price gains across our region were strong. In fact, here is a little break down.

The appreciation is for real and as each month ticks by, prices are going up. That is why it is incredibly important to have a plan and realistic expectations. In referring to the chart above, it is plain to see the affordability of each area. Buyers have had to get creative and honest with themselves regarding the city or neighborhood in which they land. Commute times are one of the biggest indicators of home cost. It is paramount to line your budget up with a realistic commute time and then dig in. Too often we’ve seen buyers tightly grip to the idea of an in-city commute, only to have it end up being a more suburban choice in the end. The months wasted trying to perform in a market that didn’t match their budget ended up costing them at least 1% a month, based on last year’s appreciation. Getting real saves time, money, and heartache.

 

Interest Rates are Rising
This aspect is actually one to pay very close attention to. We have been amazingly spoiled with historically low interest rates over the last five years. In fact, there is an entire generation of buyers who only know rates that have hovered from 3.5 – 4.5% – that is close to 3 points under the 30-year average! A good rule of thumb regarding interest rates, is that for each 1-point increase a buyer loses 10% of their buying power. That means that if you have a $500,000 budget and the rate goes up by a point, that you are now shopping for a $450,000 house if you want the same payment. Note, that shift does not take appreciation into consideration. Today’s rates have helped buyers bear the home prices in our area. It is predicted that rates will rise in 2018 by .5 to 1%.

 

Rents are High and Don’t Build Wealth
Seattle is now the 5th most expensive city to rent in the country according to the US Census Bureau. 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 1.6 years according to Zillow research.

 

Partner with a Broker Who Will Get the Job Done
A broker that has a process is key! It starts with an initial buyer consultation. I liken the buyer consultation to the seat belt you would wear on the roller coaster ride. The buyer consultation aims to unearth a buyer’s goals, research the areas they are interested in, address financing, and illustrate the challenges of the environment, so one can be successful. Time is money, and this consultation brings clarity, efficiency and trust. This upfront education coupled with a high level of communication and availability is paramount. The depth of the relationship will lead to success, and is the ingredient that enables a buyer to throw up their hands and take the thrilling plunge. It is hard to do that without a seat belt!

 

Get Your Finances in Order
Aligning with a trusted real estate professional is key, but so is aligning with a reputable and responsive mortgage lender. Getting pre-approved is the minimum, but getting pre-underwritten is a game changer. Finding a lender that is willing to put in the work up-front to vet credit, income, savings, debt, and all other financial indicators will lead to being pre-underwritten, which listing agents and sellers appreciate! Also, be aware that you do not always need to have a huge down payment to make a purchase work. Employment, assets, credit, and what you have saved all work into your ability to acquire a loan. I have seen plenty of people secure a home with 3-5% down. Education and awareness create clarity, and investing into understanding your financial footing equals empowered and more efficient decisions. Note that I mentioned “responsive”. This is a 24/7 market, and lenders who don’t work evenings and weekends can get in the way of a buyer securing a home. If you need a short list of lenders that fit this description, please contact me.

 

‘Tis the Season – Inventory is Coming
Have hope! This is the time of year where we see inventory climb month over month. There will be more selection, but bear in mind it is also the time of year that the appreciation push happens. If you are feeling 75-80% in love with a home, it is one to act on. You’re never going to “get it all”, so a willingness to focus on priorities will pay off, because waiting will have an expense.

 

If you or someone you know is considering a purchase in today’s market, please contact us. It is our pleasure to take the time to educate, devise a plan, and help buyers find success in a challenging, yet advantageous market.

 

 

Posted on February 15, 2018 at 12:58 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Market Update – Q3


Inventory levels providing more choices for buyers; is the market starting to stabilize?

As we head into the fall and winter months after an incredibly eventful spring and summer, available inventory levels are starting to ease. It is still a seller’s market (3 months of inventory or less) in most areas, but one that is providing buyers increased options. The increase in available inventory is due to pent-up seller demand starting to come to market. The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! Additionally, lending requirements remain stringent and down payments are bigger, unlike the dreaded bubble market we experienced in 2007/2008. Educated pricing and sound condition is what will drive a buyer’s interest in a home. As the market stabilizes, it will be important for consumers to partner with a broker who closely follows the market to help them make informed decisions and develop winning strategies.

Read below for market details from Snohomish County down through south King County.

 

Snohomish CountySno Co

This graph shows that we currently sit at 1.6 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (3 months or less), but one that is providing buyers increased options.  The average cumulative days on market reached 28 days in September, which was up 8% over August. Median price peaked in August at $401,000 and settled at $397,000 in September after hovering between $380,000 and $400,000 since April. For the first time since February, the average list to sale price ratio was 99% after sitting at 100-101% over the last six months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown just over 20% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

South Snohomish County South Sno

This graph shows that we currently sit at 1.4 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (three months or less), but one that is providing buyers increased options.  The average cumulative days on market reached 24 days in September, which was up 14% over August. Median price peaked in August at $453,000 and settled at $440,000 in September after hovering between $440,000 and $450,000 since March. For the first time since February, the average list to sale price ratio was 99% after sitting at 100-101% over the last six months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown just over 20% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

North King County North King

This graph shows that we currently sit at 1.1 months of inventory based on pending sales, which is the highest level we have seen since January! It is certainly still a seller’s market (3 months or less), but one that is starting to provide buyers increased options.  In fact, we saw a 13% jump in new listings month-over-month. The average cumulative days on market reached 20 days in September, which was up 18% over August. Median price peaked in June at $650,000 and settled at $600,000 in September after hovering between $605,000 and $650,000 since March. In June, there were 95% more home sales above $1M over September. For the first time since February, the average list to sale price ratio was 101% after sitting at 102-104% over the last seven months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 21% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

Eastside Eastside

This graph shows that we currently sit at 1.5 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (3 months or less), but one that is starting to provide buyers increased options. The average cumulative days on market reached 31 days in September which was up 24% over August. Median price peaked in August at $770,000 and settled at $750,000 in September after hovering between $737,000 and $770,000 since March. In June, there were 18% more home sales above $1M over September. Over the last two months, the average list to sale price ratio was 99% after sitting at 101-102% over the five months prior.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 25% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

Seattle Metro Metro

This graph shows that we currently sit at 1.1 months of inventory based on pending sales, which is the highest level we have seen since January! It is certainly still a seller’s market (3 months or less), but one that is starting to provide buyers increased options. In fact, we saw a 16% jump in new listings month-over-month. The average cumulative days on market reached 21 days in September, which was up 31% over August. Median price peaked in June at $650,000 and settled at $605,000 in September after hovering between $608,000 and $650,000 since March. In June, there were 23% more home sales above $1M over September. For the first time since February, the average list to sale price ratio was 101% after sitting at 102-104% over the last seven months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 22% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

South King County South King

This graph shows that we currently sit at 1.7 months of inventory based on pending sales, which is the highest level we have seen in all of 2016! It is still a seller’s market (3 months or less), but one that is providing buyers increased options. The average cumulative days on market reached 27 days in both August and September, which was up 23% over July. Median price peaked in June at $371,000 and settled at $360,000 in September after hovering between $350,000 and $371,000 since March. For the first time since March, the average list to sale price ratio was 99% in August and September after sitting at 100-101% the prior four months.

The return of strong equity levels have brought sellers to market that have been waiting to jump in for some time. In fact, average prices have grown 16% over the last two years, freeing up sellers to make the moves they have been waiting for. Continued buyer demand due to our flourishing job market and historically low interest rates have steadily absorbed new inventory, but we are finally starting to see a trend toward some more balance. This is good news! We are still seeing multiple offers and quick market times, but not quite the frenzy that we experienced earlier this year.

All of these factors indicate that we may finally be headed towards a more stabilized market with positive attributes for both buyers and sellers.

 

These are 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 October 18, 2016 at 4:02 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 , , , , , , ,

Market Update – Q3 2015

The first three quarters of 2015 are measuring up to be a banner year in real estate. After three solid years of recovery, equity levels are providing sellers the opportunity to net more from their homes, providing them improved lifestyle options. More movement in the market would be welcomed as it would temper price growth and make life a little easier on buyers. The strength of our local economy coupled with low interest rates has created a lot of demand. Keep in mind that lending requirements are much more stringent compared to the past “up” market, protecting us from the dreaded bubble we experienced in 2007/2008.
Scroll down for more details about the third quarter market in Snohomish County, South Snohomish County, North King County, the Eastside, Seattle Metro and South King County.

 

Snohomish County
Seasonal patterns are returning after the market’s fall and recovery


The graph above shows a two-year history of the market, where we have clearly seen a surge of inventory from March to August. In fact we saw a 48% increase in inventory during this time period. While that is a welcome increase, inventory growth was down 1% from the year prior, all while closed sales were up 18%! Months of Inventory based on pending sales has held steady at an average of two months over the last year. Due to demand outweighing supply we continue to see above-normal price growth, with both median and average prices up 9% complete year-over-year. 

South Snohomish County
Seasonal patterns are returning after the market’s fall and recovery


You can see in the graph above a clear surge of inventory came to market from March to August. In fact we saw a 53% increase in inventory during this time period. While that is a welcome increase, inventory growth was down 5% from the year prior, all while closed sales were up 19%! Months of Inventory based on pending sales has held steady at an average of two months over the last year. Due to demand outweighing supply we continue to see above-normal price growth, with both median and average prices up 9% complete year-over-year.

North King County
Price increases are strong due to high demand and low inventory


All indicators, such as sold median price, sold average price and sold price per square foot point to a 10% increase in prices complete year-over-year. The median price in North King County this September was $555,000 and the average was $609,000. Average days on market have shrunk to as low as 22 days this last month, and the list to sale price ratio was 101%. Lack of supply and high demand is the gas in this market’s engine. Months of inventory based on pending sales finally crested one month after a small surge of additional inventory in the third quarter.

Eastside
Seasonal patterns are returning after the market’s fall and recovery


The graph above shows a two-year history of the market, where we have clearly seen a surge of inventory from February to August. In fact we saw a 44% increase in inventory during this time period. While that is a welcome increase, inventory growth was down 45% from the year prior, all while closed sales were up 10%! Months of Inventory based on pending sales has held steady at an average of 1.5 months over the last year. Due to demand outweighing supply we continue to see above normal price growth, with both median and average prices up 9% complete year-over-year. 

Seattle Metro
Price increases are strong due to high demand and low inventory


All indicators, such as sold median price, sold average price and sold price per square foot point to an 11% increase in prices complete year-over-year. The median price in the Seattle Metro area this September was $556,000 and the average was $639,000. Average days on market have shrunk to as low as 22 days this last month, and the list to sale price ratio was 101%. Lack of supply and high demand is the gas in this market’s engine. Months of inventory based on pending sales finally crested one month after a small surge of additional inventory in the third quarter.

South King County
Price increases are strong due to high demand and low inventory


All indicators point to strong price increases with median price up 11%, average price up 8% and average price per square foot up 8% complete year-over-year. The median price in South King County this September was $335,000 and the average was $358,000. Average days on market have shrunk to as low as 36 days this last month, and the list to sale price ratio was 99%. Lack of supply and high demand is the gas in this market’s engine. Months of inventory based on pending sales finally crested 1.5 months after a small surge of additional inventory in the third quarter.

 

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 October 14, 2015 at 4:52 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , ,