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 , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Quarterly Market Trends: Eastside

Q4 2017

Price growth was particularly strong in 2017! Median was up 15% and average price up 16% over 2016. Median price in 2017 landed at $865,000 and the average at $1,049,000. The average amount of days it took to sell a house in 2017 was 24 days, which is 17% faster than 2016. The average list-to-sale price ratio over the last year was 101%, with the spring months as high as 103%! In 2017, inventory growth continued to be a challenge, with a 4% decrease in new listings compared to 2016. Even with inventory limitations there were a near equal amount of sales! This phenomenon illustrates strong buyer demand and a need for more listings.

Demand for Eastside real estate has grown due to close proximity to job centers, great schools and quality of life. Over the last year, the Eastside was 70% more expensive than south Snohomish County and 22% over Seattle Metro. Historically low interest rates continue to drive the market as well, they have helped offset the increase in prices. Sellers are enjoying great returns due to this phenomenon and buyers are securing mortgages with minor debt service.

This is only a snapshot of the trends on the Eastside area; please contact us if you would like further explanation of how the latest trends relate to you.

 

Posted on January 19, 2018 at 4:08 pm
Windermere Real Estate North | Category: Local Market Analysis, Quarterly Reports | Tagged , , , , , , , , , , , , , , , , , ,

Quarterly Market Trends: South Snohomish County

Q4 2017

Price growth was particularly strong in 2017! Median was up 14% and average price up 12% over 2016. Median price in 2017 landed at $508,000 and the average at $543,000. The average amount of days it took to sell a house in 2017 was 24 days, which is 17% faster than 2016. The average list-to-sale price ratio over the last year was 101%, with the spring months as high as 103%! In 2017, inventory growth continued to be a challenge, with a 1% decrease in new listings compared to 2016. Even with inventory limitations there were 4% more sales! This phenomenon illustrates strong buyer demand and a need for more listings.

South Snohomish County real estate has seen a steady stream of buyers come our way due to affordability, reasonable commute times to job centers and quality of life. In fact, the median price in 2017 was 41% higher in north King County. Historically low interest rates continue to drive the market as well, they have helped offset the increase in prices. Sellers are enjoying great returns due to this phenomenon and buyers are securing mortgages with minor debt service.

This is only a snapshot of the trends in south Snohomish County; please contact us if you would like further explanation of how the latest trends relate to you.

 

Posted on January 19, 2018 at 3:56 pm
Windermere Real Estate North | Category: Local Market Analysis, Quarterly Reports | Tagged , , , , , , , , , , , , , ,

Quarterly Market Trends: North Snohomish County

Q4 2017

Price growth was particularly strong in 2017! Median and average prices were up 13% over 2016. Median price in 2017 landed at $371,000 and the average at $400,000. The average amount of days it took to sell a house in 2017 was 35 days, which is 10% faster than 2016. The average list-to-sale price ratio over the last year was 99%, with the spring months as high as 101%! In 2017, inventory growth continued to be a challenge, with an 8% decrease in new listings compared to 2016. Even with inventory limitations there were 3% more sales! This phenomenon illustrates strong buyer demand and a need for more listings.

North Snohomish County real estate has seen a steady stream of buyers come our way due to affordability and quality of life. In fact, the median price in 2017 was 37% higher in south Snohomish County. Historically low interest rates continue to drive the market as well, they have helped offset the increase in prices. Sellers are enjoying great returns due to this phenomenon and buyers are securing mortgages with minor debt service.

This is only a snapshot of the trends in north Snohomish County; please contact us if you would like further explanation of how the latest trends relate to you.

 

 

Posted on January 19, 2018 at 3:53 pm
Windermere Real Estate North | Category: Local Market Analysis, Quarterly Reports | Tagged , , , , , , , , , , , ,

3 Reasons why we are NOT Headed Towards Another Bubble

 

real estate bubble

Are we headed for another housing collapse?

We get asked this question often, and we can understand why. With the 2008 Great Recession not too far back in our rear-view mirror it is understandable that folks don’t want history to repeat itself, as that was a very painful time for many. Also, price appreciation has been rapid across the country, but especially in our region. The large price gains might seem familiar to the gains of the previous up market of 2004-2007, but the environment is much different.  Here are three reasons why we are not headed towards (or in) another real estate bubble:

 

1. Lending Requirements

real estate bubble mortgage credit availabilityAs this graph shows, lending requirements are much more stringent now than what they were prior to the fall of the housing market.

Previous lending practices allowed people to get into homes with risky debt-to-income ratios, low credit scores and undocumented incomes. They called this sub-prime lending. A large part of why the housing bubble burst 10 years ago was due to people getting into mortgages they were not equipped to handle, which lend to the eventual fall of sub-prime lending. Currently, the average credit score of secured mortgages over the last 12 months according to Ellie Mae was 724. During the days of sub-prime lending people were funding loans with scores as low as 560! This, coupled with many zero-down loan programs and the risky terms mentioned above left many new homeowners with little to no equity. When you have little or no equity it very easy to just walk away.

 

real estate bubble equity by state
The graph above shows the percentage of homes in our state with significant equity (20% or more) according to CoreLogic. Today many homeowners, especially in our region are making large down payments to begin with. Believe me, when competing with multiple offers on a house, the size of down payment matters – hence many buyers landing homes today are making large down payments. Unlike the market prior to the crash, when people have high equity levels they are not likely to abandon their home or miss payments.

2. Inventory Levels  &  3. Our Job Market

The biggest challenge in our market has been low inventory levels and high housing demand. It’s simply the concept of supply and demand. Our thriving job market has afforded folks already in our area the ability to make moves, and it is bringing people into our area from other parts of the country. Washington State’s net in-migration is 43% higher than it was 10 years ago. This has created increased demand, especially for homes closer to job centers resulting is shorter commutes. When you have increased demand and not enough homes to absorb the buyers, prices go up. Over the last three years we have easily seen a 10% increase in prices year-over-year. That is above the norm and should slow down as inventory increases. As inventory increases we anticipate a leveling out of appreciation rates to historical norms of 3-4% annually, but not decreasing home values like the 2008-2010 crash.

We understand that the recent increase in home prices has been big and that it might remind you of the previous up market before the crash. Hopefully digging into the topics above has shed some light on how it is different. According to Matthew Gardner, Windermere’s Chief Economist and nationally sought after expert on all things real estate, buyers should not wait this market out, due to future price appreciation and today’s historically low interest rates. Check out his latest vlog that addresses this topic.

As always, it is our goal to help keep the community informed, and empower strong decisions. Please let us know if we can answer any questions or help you or anyone you know with their real estate needs.

 

 

Posted on August 23, 2017 at 5:05 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , , , , , , , , , , , ,

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 , , , , , , , , ,

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 , , , , , , , ,

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 , , , , , , , , , , , , , , ,

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 , , , , , , ,

It’s an Amazing Time to be a Seller!

The two graphs here illustrate the amount of homes for sale and the amount of homes sold over the past two years in King and Snohomish Counties. This gives us a good look at the simple principle of supply and demand. King CoWe 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 County has 1.2 months of inventory based on pending sales and Snohomish County 1.3. Where this particular Seller's market is unique is that it is not only a shortage of inventory creating this environment, but very high buyer demand as well. Our local job market is thriving, 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. Couple the healthy local economy with still historically low interest rates and the audience for homes that come to the market is huge! Multiple offers are very common and prices are increasing.

Snohomish CoIn order to get a better understanding of the market conditions we dug a little deeper and were quite surprised. We looked into the amount of new listings that came to market this January, assuming that there would be a huge deficit of new listings – we were wrong! In King County there were only 111 less listings (-4%)  that came to market this January compared to last January, and only 16 less listings (-1%) in Snohomish County. Yes, fewer homes are coming to market, but the high buyer demand has eaten up any inventory carryover month-to-month, leaving us with 30% less homes to choose from compared to the year prior – hence the very low months of inventory. We are coming close to selling out of homes each month and new inventory is required to create more market. It is sort of mind blowing! The good news is, if you look at the graphs above you will see a seasonal uptick in inventory in the Spring and Summer months, and that 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 Spring increase in listings will enjoy a larger audience due to less competition. 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, communication and market knowledge is what sets a highly capable selling agent apart and is required to prevail.

If you have any curiosities or questions regarding the value of your current home or purchase opportunities, please contact any of our agents. It is always our goal to help keep you informed on all things real estate, and help you manage these investments.

 

Posted on February 24, 2016 at 4:48 pm
Windermere Real Estate North | Category: Local Market Analysis | Tagged , , , , , ,