The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.
Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.
I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.
Home Sales Activity
- There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
- Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
- The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
- The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.
- Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
- Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
- When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
- The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.
Days on Market
- The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
- King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
- Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
- Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement.
Inventory is short and buyers are plentiful.
Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year.
Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.
This article originally appeared on the Windermere.com blog.
It was another month of record-setting home prices in June as the area yet again took the prize for the hottest real estate market in the country. In a bright spot for buyers, the number of new listings added in June was the highest total for any single month since May 2008. While inventory is still low, the pace of sales is slowing and the number of multiple offers are down, suggesting that we may soon see a slight reprieve from the last year of rapid-fire growth.
The median price of a single-family home on the Eastside soared 19 percent from a year ago to a new record-high of $885,000. Despite that increase, multiple offers—while down—are still common. With most buyers presenting offers on multiple properties before purchasing a home, working with a broker to create a strong strategic plan, clear negotiating parameters, and a streamlined offer are critical for success.
The median price of a single-family home in King County climbed 14 percent over a year ago to a new record of $653,000. Inventory remains extremely tight, and homes are selling very quickly. According to a broker analysis, 80-to-90 percent of sellers in the Puget Sound area are accepting offers on their homes within 30 days of listing. In hot neighborhoods, that number can be just a few days.
Seattle home prices are rising at the fastest rate in nation. U.S. Census data shows Seattle is gaining about 1,100 residents week. With supply unable to keep up with soaring demand, prices just keep climbing. The median price for a single-family home in Seattle jumped 13 percent over a year ago to $750,000. The increase in the number of $1 million-plus homes in the city was among the highest in the country.
Buyers looking to get more home for their dollar continue to make the move north to Snohomish County. Demand is so high that new construction homes are selling before they’re built, with many new homes not even hitting the market. The median price of a single-family home sold in June increased 14 percent over the same time last year to $450,000, unchanged from last month’s record high.
We knew Seattle area home prices were growing – and quickly – but just how much and how fast? Enough that we surpassed Portland, Dallas, and other major metro areas to top the country for home price growth for the seventh straight month. According to the monthly Case-Shiller home price index, single-family home prices across the Seattle metro area in March increased 12.3 percent from a year prior – the fastest growth in more than three years.
This rapid increase stems from the fact that there are more interested buyers than homes for sale. This imbalance means bidding wars are not only common, but they should be expected. New data shows about 90 percent of houses for sale in Seattle over the last two months wound up in bidding wars. Compare that to three years ago when 71 percent of homes attracted multiple offers and the beginning of the decade when less than half did. Additionally, this fierce competition has spread outside of the city of Seattle to affect the entire metro area. It has been reported that home prices have set records in places an hour’s drive from Seattle in every direction.
What does all of this mean for buyers?
It is taking qualified buyers six months to a year to purchase a home because they keep losing in multiple offer situations, some of which have been won by offers of more than $100,000 above asking price. Eager buyers are waiving contingencies and inspections, submitting more cash offers, and submitting escalating bids on houses sight unseen.
If you are looking to buy a home, it is more important than ever for you to have a knowledgeable, experienced agent by your side to help you navigate our hot market. I would appreciate the opportunity to help you rise above the competition to find and secure your dream home.
Source: The Seattle Times
The hottest real estate market in the country just keeps getting hotter. Despite a large number of new listings, home prices in the Puget Sound area continued to set records in May. According to a Seattle Times article, “For the first time since the 2007 housing bubble, every county in the central Puget Sound region has set a new median home price record.” Brokers hope this news will help entice more sellers to put their homes on the market.
While down just slightly from its record high last month, the median price of a single-family home on the Eastside was up 15 percent from a year ago to $875,000. With just three weeks of inventory, those looking to buy a home can continue to count on a highly competitive market. It is key for buyers to work with a broker on a buying strategy, and to be willing to act quickly to make an offer.
King County is starved for inventory. The number of homes for sale in the county dropped 20 percent from a year ago. The good news: The number of new listings year-over-year grew for the first time in 2017. The bad news: They’re getting snapped up as soon as they come on the market. The median price of a single-family home in King County jumped 13 percent over a year ago to a new record of $632,000.
Seattle is the fastest growing city in the country, and that demand is driving prices ever higher. That demand combined with razor-thin inventory has resulted in Seattle topping the nation in bidding wars. As a result, it’s no surprise that home prices here set yet another record in May. The median price for a single-family home in Seattle soared 14 percent over a year ago to $729,000.
A steady stream of buyers being priced out of King County have set their sights north in hopes of finding a more affordable house payment. While home prices here are indeed less, that gap has been slowly closing. The median price of a single-family home jumped 15 percent over the same time last year to $450,000, an all-time record.
Today’s buyers use a lot of resources in their home search – and 92% count on a real estate agent to help them purchase their home.
How People Buy Homes Today
If you’re looking to buy or sell your home, reach out to me to help you successfully navigate the Seattle housing market.
This post originally appeared on the Windermere Eastside blog.
The local real estate market—already the hottest in the country—set yet another price record in April. The number of homes for sale dropped 27 percent compared to a year ago, the lowest amount of inventory ever recorded for a spring month. The historically low supply of homes is making competition among buyers fierce. Sellers are in the enviable position of being able to structure sales agreements to include concessions such as rent-backs and longer closing time so they can take the time to find their next home.
The median price of a single-family home on the Eastside reached an all-time high of $880,000 in April, a 21 percent jump over last April. That represents an increase of $150,000 over a year ago, the largest dollar increase on record. With our strong economy and growing population, brokers are not predicting a slowdown any time soon.
Inventory in King County just keeps getting tighter. There are just 1,900 homes on the market here. That compares to nearly 8,000 in April 2011. As buyers bid up existing homes, prices have escalated sharply. The median price of a single-family home jumped 16 percent from the same time last year to $625,000.
Seattle set a record for home prices for the third straight month. The median price of a single-family home rose 13 percent over the same time last year to $722,250. Like the rest of King County, lack of inventory was the driver. In one of the city’s hottest markets, Ballard, there are just 19 single-family homes on the market.
Home prices in Snohomish County are rising at their fastest pace in four years. The median price of a single-family home soared 17 percent from a year ago to $440,000. While that increase is substantial, prices here are still 30 percent less than in King County.
It seems like a tale as old as time. Many people are wanting to move to Seattle, but no one else really wants to leave. This leads to our favorite real estate headline for the last several years: inventory is low, prices are rising.
Seattle-based Zillow recently analyzed searches on their website and compared the location of its users with the cities in which they are searching. They used this information to create a chart of the most desirable cities based on their popularity with outsiders and current residents.
Unsurprisingly, Seattle ranked high in the category “Residents Want To Stay, Outsiders Want In” with about 70 percent of current residents continuing to search here.
What does this mean for the Eastside?
It isn’t just our breathtaking scenery and active lifestyles making the Seattle area’s population grow by nearly 1,000 residents per week over the last several years. Our strong economy and plentiful technology jobs are enticing newcomers. Some areas on the Eastside even have higher home prices and carry some pretty stiff competition.
There’s nothing more exciting, rewarding, and fulfilling than buying a home. However, it’s a complex transaction, and there are a number of steps along the path that can confuse, betwixt, and befuddle even the most seasoned buyers and sellers.
How can you avoid those potential pitfalls and common mistakes? Look to your real estate professional for advice and keep these guidelines in mind:
#1 Review your credit reports ahead of time
Review your credit report a few months before you begin your house hunt, and you’ll have time to ensure the facts are correct, and be able to dispute mistakes before a mortgage lender checks your credit. Get a copy of your credit report from Experian, Equifax, and TransUnion. Why all three? Because, if the scores differ, the bank will typically use the lowest one. Alert the credit bureaus if you see any mistakes, fix any problems you discover, and don’t apply for any new credit until after your home loan closes.
#2 Get pre-approved
Before getting serious about your hunt for a new house, you’ll want to choose a lender and get pre-approved for a mortgage (not just pre-qualified—which is a cursory review of your finances—but pre-approved for a loan of a specific amount). Pre-approval lets sellers know you’re serious. Most importantly, pre-approval will help you determine exactly how much you can comfortably afford to spend.
#3 Know what you want
You and your real estate agent should both be clear about the house you want to buy. Put it in writing. First, make a list of all the features and amenities you really want. Then, number each item and prioritize them. Now, divide the list into must-haves and really-wants. A good place to start is the “HUD Wish List,” which is available online for free at http://www.hud.gov/buying/wishlist.pdf
#4 Account for hidden costs
In addition to the purchase price of the home, there are additional costs you need to take into consideration, such as closing costs, appraisal fees, and escrow fees. Once you find a prospective home, you’ll want to:
- Get estimates for any repairs or remodeling it may need.
- Estimate how much it will cost to maintain (gas, electric, utilities, etc.).
- Determine how much you’ll pay in taxes monthly and/or annually.
- Learn whether there are any homeowner or development dues associated with the property.
#5 Get an inspection
Buying a home is emotionally charged—which can make it difficult for buyers to see the house for what it truly is. That’s why you need impartial third parties who can help you logically analyze the condition of the property. Your agent is there to advise you, but you also need a home inspector to assess any hidden flaws, structural damage or faulty systems.
#6 Evaluate the neighborhood and location
When house hunting, it’s easy to become overly focused on the number of bedrooms and bathrooms, the condition of the home and its amenities while overlooking the subtleties of the surrounding neighborhood. Take time to check crime reports, school options, churches and shopping. If schools are a key factor, do more than simply research the statistics; speak with the principal(s) and chat with the parents waiting outside.
#1 Avoid becoming emotional or sentimental about the sale
Once you decide to sell your house, it’s time to strip out the emotion and look at it as a commodity in a business transaction. If you start reminiscing about all the good times you had and the hard work you invested, it will only make it that much harder to successfully price, prepare, and market the home.
#2 Fix problems (or price accordingly)
Homes with deferred maintenance and repair issues can take far longer to sell and can be subject to last-minute sale-cancellations. These homes also often sell for less than their legitimate market value. If you simply can’t afford to address critical issues, be prepared to work with your agent to price and market your home accordingly.
#3 Don’t overprice your home (and/or refuse to negotiate)
Getting top dollar is the dream of every seller. But it’s essential that you let the market dictate that price, not your emotions or financial situation. Allow your agent to research and prepare a market analysis that factors in the value of similar homes in the area, and trust those results.
#4 Use quality photos
The vast majority of prospective buyers today search for homes online first. In order to make a good first impression, you need a wealth of high-quality photos of your home and surrounding grounds. You may also need to consider professional staging in order to position your home in the best possible light for prospective buyers.
The process of buying or selling a home can have plenty of twists and turns, but with some smart decision making, you can avoid the most common mistakes and pitfalls.
This post originally appeared on the Windermere.com blog.
While we finally saw an increase in new listings in March, there was an even greater jump in sales. Lack of supply continued to push prices to new record highs. For the fifth straight month, our region has experienced the sharpest home price increases of any major market in the country. While that may be tough news for buyers, here’s the other reality: rents in the city of Seattle have increased 57 percent in the last six years. Brokers are hoping that more sellers will jump into the market this spring to help meet buyer demand.
After setting a price record in February, the Eastside set yet another record in March. The median price for a single-family home sold in March jumped 18 percent to $870,000. The strong appreciation is reflected in this statistic: For the first three months of 2017, the number of homes sold priced at $1 million or more was up 60 percent compared to the same period a year ago. What was once considered a luxury price tag is now the new normal.
Home prices in King County are growing about twice as fast as the national average. The median price of a single-family home sold in March soared 13 percent over last year to $599,950, an all-time high. Even though new inventory was added, it was snapped up as soon as it came on the market. About 75 percent of homes sold within the first 30 days.
With just two weeks of inventory available, demand in Seattle remains as strong as ever. Packed open houses, multiple offers, and escalation clauses continue to be the norm. The pressure on inventory pushed prices here to yet another all-time high. The median price of a single-family home in the city increased 9 percent over a year ago to $700,000.
Snohomish County set a new price record for the second straight month, with the median price of a single-family home up 10 percent from a year ago to $425,000. Supply is very limited, with just over two weeks of available inventory. Buyers looking for some relief from King County’s hefty housing prices are adding to the competition for a limited supply of homes.
The National Association of REALTORS® recently released their 2016 Profile of Home Buyers and Sellers. Here are a few items about buyers that I thought you’d find interesting.
• The top reason buyers purchase a home is they want a place of their own.
• Buyers chose homes fairly close to their last residence. In our region, buyers purchase a home within a 13 mile radius of their last residence.
If you’re looking to buy or sell your home, let’s talk! I will help you successfully navigate the Seattle housing market.