To read article on Realtor.com, click here.
The Seattle-area housing market has clearly split into two: Buyers looking for higher-end homes in pricier cities like Seattle and Bellevue aren’t paying any more than they did a year ago. Meanwhile, those shopping around for something resembling a deal, perhaps in Tacoma or Everett, are still confronted with the same old hot market from years past.
The national Case-Shiller home price index, released Tuesday, showed Greater Seattle had one of the coolest housing markets in all the land when looking at the full metro area.
Prices regionwide in February grew 2.8% from a year ago, below the national average of 4%. Among the 20 regions covered in the report, only four — San Diego, San Francisco, Los Angeles and Chicago — had smaller price increases.
But the regionwide average — which spans King, Snohomish and Pierce counties — covers up vast differences when you zoom in closer.
The report divides the region into three even price tiers, roughly those homes selling for above $600,000, those below $385,000 and those in between.
Home values on the priciest level, which would include most homes Seattle and the Eastside, actually dropped a smidgen on a year-over-year basis. Prices even dipped slightly on a month-over-month basis, defying the normal seasonal gains.
How unusual is that? The last time any segment of the market saw prices drop on an annual basis was eight years ago, when home values bottomed out following the recession. Flash back to this time last year and the priciest homes were surging 12% in value.
But look at the cheapest group of homes, typically found in the outlying parts of the metro area, and it’s like traveling to an entirely different area: These saw prices grow about 8% from a year prior, including a jump of 1.5% just in the last month.
For perspective, only one region, Las Vegas, had a bigger annual price bump when looking at regions as a whole.
Homes in the middle-price bracket, which you might find in Lynnwood or Renton, saw prices grow 3.5%, slightly below the national average.
In Dan “Dan-O” Olague’s Puyallup real estate office, “it is back to a hot market.”
“Anything under $300,000 has not lasted more than a week,” said Olague, of John L. Scott Real Estate. That’s about as quickly as a home can conceivably sell.
He noted a 1,300-square-foot house in Spanaway he recently listed for $269,000 – and quickly got 14 offers, with some going over $300,000.
As has been the case, more buyers are coming down from King County, particularly for homes in Tacoma along the Sounder train line, where a house that can be had for $400,000 might cost $700,000 or more in Seattle.
“They can buy more house down here than they can in King County,” Olague said.
Up north, Jerry Melchisedeck, director of operations for RE/MAX Elite’s Snohomish County bureau, said “there’s a marked difference between the homes in the $300 and $400,000s and how quickly they’re selling vs. higher price points.”
“I’d expect that (lower) price point to continue be to very competitive,” he added.
John Manning, who owns a RE/MAX branch in Ballard but has listings in Snohomish County, said he’s seen an influx of empty-nesters moving to more affordable, smaller homes up north. And with Amazon picking up its hiring in Bellevue, there has been more activity from its employees looking in Kenmore and north across the county line, he said.
Why the divergence between the higher- and lower-cost markets? There are fewer people out there snatching up higher-end homes, making competition less hectic than it used to be.
The number of homes for sale across the Seattle area has grown faster in the last year than anywhere except San Jose, according to Redfin.
The surge is almost entirely attributable to homes sitting on the market unsold for longer: Home sales here are dropping at among the fastest rates in the country, as well. Most of those stale homes not getting offers are on the higher-end side of things.
April 30, 2019 at 6:53 am Updated May 1, 2019 at 12:10 pm
Prices of single-family homes across the Seattle area aren’t soaring the way they used to. (Greg Gilbert / The Seattle Times)
Seattle Times real estate reporter
By Clare Trapasso | Apr 23, 2019
Despite a real estate slowdown gripping the nation, this year’s housing market is expected to be busier than realtor.com® economists originally predicted late last year. That means more home sales—and higher prices—are on the way.
The anticipated uptick in activity is due to lower mortgage rates, which make homes more affordable for buyers. The economic team expected rates to climb to 5.5% in 2019, but instead they have hovered around 4%. (They were 4.17% on 30-year, fixed-rate mortgages as of April 18, according to Freddie Mac data.) Economists say rates are now likely to rise a little to 4.5%, still well below what buyers were dreading.
However, it’ll be nothing like the feeding frenzy of recent years.”It’s still going to be a lukewarm year for the housing market,” says Chief Economist Danielle Hale of realtor.com. “We’re going to see higher prices and slightly higher home sales than we expected. But home sales are still going to decline slightly as a result of the housing slowdown. There’s a gap between what sellers are looking for and buyers are hoping to pay.”
While a single percentage point difference may not seem that significant, it can add more than $100 to the monthly loan payment on a median-priced home of $300,000. (This assumes buyers put 20% down.) That can translate into tens of thousands of dollars over the life of a 30-year loan.
The downside for buyers—and upside for sellers—is that prices are expected to rise more than Hale’s team originally forecast, going up 2.9% in 2019 instead of 2.2%. That’s because the swelling ranks of buyers motivated by those lower mortgage rates will increase demand—and therefore prices.
Meanwhile, realtor.com’s economists predict the number of home sales will almost hold steady, dipping just 0.3%. They originally believed the number of sales would fall by 2%.
The market has slowed down from previous years because sellers, seeing an end to the good days of high prices, rushed to put their homes on the market. But this happened at the same time that many buyers backed off because of those same high prices. The glut in supply led to lower price growth and fewer home sales.
But as always, local conditions will be the main factor for real estate in your market, Hale says.
“In some markets there’s still not enough housing available, so buyers are likely to find a competitive market,” she says. “But in some markets prices are so high that buyers are choosing to be patient and sit on the sidelines.”
By CHRISTOPHER RUGABER
The Associated Press
WASHINGTON (AP) — Purchasing a home just became a lot cheaper, thanks mostly to the Federal Reserve’s decision last week to put its interest rate hikes on hold for now.
Mortgage buyer Freddie Mac said Thursday that the average 30-year fixed rate mortgage plunged to 4.06 percent this week, down from 4.28 percent last week. That’s the steepest weekly drop in a decade.
Last week, Fed chairman Jerome Powell said the U.S. economy faces several headwinds, including slowing global growth, a trade war with China, and fading impacts from last year’s tax cuts. Fed policymakers signaled they were unlikely to raise rates this year, after projecting two hikes in December.
Lower mortgage rates, slowing home price increases and a pickup in the number of available homes appear to be rejuvenating home sales after a slowdown last year.
Sales of existing homes surged 11.8 percent in January, a sign that lower rates were encouraging more people to buy homes. The average 30-year rate reached 4.95 percent in November, following a series of rate hikes by the Fed.
Mortgage costs are more directly influenced by the yield on the 10-year Treasury note, which also rose last year as many investors shifted money into stocks. Stock market indexes rose at a healthy pace until last fall.
The yield on the 10-year note has fallen sharply since last year, when it touched 3.21 percent in November. On Thursday it fell to 2.39 percent in mid-day trading.
Potential buyers have rushed to take advantage of the cheaper borrowing costs. An index measuring applications for mortgage loans jumped 9 percent last week, the Mortgage Bankers Association said.
Fewer people signed contracts to buy homes in February compared with the previous month, suggesting home sales will cool off a bit after January’s big jump. But economists expect sales will continue to improve this year after last year’s slowdown.
Hiring has been steady in recent months and average pay growth has accelerated, making a home purchase more affordable.
“With mortgage demand strengthening in the wake of the decline in mortgage rates, we look for better sales in the second quarter,” said Ian Shepherson, chief economist at Pantheon Macroeconomics.
Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.
The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.
The average fee on 30-year fixed-rate mortgages ticked up this week to 0.5 point from 0.4 point.
The average 15-year mortgage rate also fell, to 3.57 percent from 3.71 percent. The fee was unchanged at 0.4 point.
The average rate for five-year adjustable-rate mortgages dropped less sharply, to 3.75 percent from 3.84 percent. The fee remained at 0.3 point.
View original article on SeattleTimes.com
The spring home buying season started early this year. Open houses had increased attendance and bidding wars returned. After months of softening, home prices in most of the region jumped significantly from the prior month. With just one month of data, we’ll have to wait and see if this is the start of a longer upward trend.
The Eastside was one area of King County that continued to see prices moderate. The median price of a single-family home on the Eastside was $900,000 in February, a drop of 5 percent from a year ago and down slightly from last month. However, supply here isn’t nearly enough to meet demand, a fact that most likely won’t change any time soon. Amazon’s latest expansion in Bellevue is expected to bring a significant wave of new employees to the city.
The median single-family home in King County sold for $655,000 in February. While up slightly less than 1 percent year-over-year, it was an increase of $45,000 over January. Southeast King County, which includes Kent, Renton and Auburn, saw the greatest gains with prices rising 4.5 percent over the previous year. While inventory has grown, it is less than half of the four to six months that is considered balanced.
More inventory and low interest rates helped bring buyers back into the market. The median price of a single-family home in Seattle hit $730,000 in February, down 6 percent from a year ago, but up $18,500 from January. With just six weeks of available supply, Seattle continues to have the tightest inventory in the county. Seattle’s record development boom shows little signs of easing, so we can expect strong demand to continue.
The median price of a single-family home in Snohomish County reached $474,947 in February. Although that is a 2 percent decrease from last year, it is $5,000 more than January. As buyers push outside of King County to search for more reasonably priced homes, Snohomish County continues to struggle to find enough inventory to meet growing demand.
Read original article on windermereeastside.com.
Buyers are back in the Emerald City, with more homes to choose from and better prices
f the dramatic slowdown in Seattle’s housing market has you waiting for a crash to buy your next home, don’t hold your breath.
New housing data indicates the so-called Emerald City is already pulling out of a monthslong slump, during which the median luxury home price fell 13% in six months, sales plummeted and some predicted doomsday scenarios where skilled workers would flee Seattle, birthplace of Microsoft and Amazon, for budding tech hubs in the South and East Coast. But in January and February, Seattle-based agents reported bustling open houses and an earlier-than-usual start to the spring buying season. So if you’re looking to take advantage of the city’s softened market conditions—it’s now or never.
“Nothing’s going to come crashing down,” said Skylar Olsen, director of economic research at Zillow. “This isn’t a housing bubble popping, this is a market adjustment.”
A thriving technology industry has fueled the housing market in Seattle over the past eight years, with Amazon alone adding roughly 40,000 new jobs in that time. The median home price soared 138% since the post-recession trough in 2013, and the city enjoyed significant population growth as highly skilled, well-paid workers ditched Silicon Valley and San Francisco in favor of Seattle’s relative affordability.
Home price has climbed each year by double digits, faster than almost anywhere else in the U.S., which made the sudden jolt to the market last summer all the more jarring. By the fourth quarter of 2018, the median luxury sales price was $2.23 million, down 13% from its May peak of $2.562 million and sales dropped more than 20%, according to data provided by real estate site Redfin, which defines luxury as the top 5% of sales.
Seattle wasn’t alone. Many U.S. cities experienced slowing sales and waning price growth in the second half of 2018, as affordability, the uncertainty of midterm elections and rising interest rates put off buyers. Seattle suffered the added uncertainty of HQ2, Amazon’s national search for a second headquarters, which some feared would draw talent and jobs away from the retail giant’s base.
On top of that, volatility in tech stocks, including Amazon, broke years of record growth, bruising compensation last year for high earners in the Seattle area. Last year, the technology-heavy Nasdaq 100 index plunged 23% from an all-time high in August to its lowest point of the year on Christmas Eve. Tech stocks have since picked back up, though not to the levels they were trading at last summer.
At one point, Redfin reported that search traffic showed more house hunters looking to move out of Seattle than into it—sparking speculation that area residents were already abandoning the city.
All of that, it appears now, was wildly overblown.
“We don’t quite know where the bottom is, but there’s no real reason that we will have a crash like we did during the last downturn,” Ms. Olsen said. “If you think about Seattle long-term, I don’t think buyers should have cause to think that if they buy now, they will be underwater in five years.”
It’s likely the median sales price will continue to decline in the coming months. But that’s more a reflection of last year’s fracas rather than a real-time lens into market conditions because closing data has a time lag.
Instead, buyers and sellers should look at the recent boost in pending sales, a timelier measure. In the city of Seattle, there were 762 homes that went into contract in January, a near-30% increase compared to a year ago, according to data from the Northwest Multiple Listing Service. The pricey Eastside, which includes Bellevue, across Lake Washington from Seattle, has also seen a bump in activity. Pending sales there increased 10% in January compared to a year ago.
Grant Burton, a Seattle-based real estate agent who works in upmarket neighborhoods including Capitol Hill, Madison Park and Denny-Blaine, said he’s had an exceptional start to the year, particularly for the $2 million to $4 million market.
“It was like night and day, the ball dropped on New Year’s and I had a flood of people coming to buy, coming to look at homes,” Mr. Burton said.
Inventory in the city has more than doubled since this time last year, building up during the slowdown in 2018 and giving buyers more options. Meanwhile, a recent decline in 30-year mortgage rates has also boosted confidence and purchase power.
“We’ve had an early spring that I am blown away by,” Mr. Burton said.
Savvy house hunters are starting their search before the high season—traditionally from May to September—when an annual horde of buyers crowd the market. At the moment, buyers are competing with two or three other bidders on homes rather than a dozen other people, brokers said.
“Now could be a sweet spot for buyers,” said Daryl Fairweather, chief economist at Redfin. “If you see a home that’s been sitting on the market for a while, you might be able to negotiate and buy it for less than the asking price.”
David Palmer, a Seattle agent affiliated with Redfin, also said he’s seen an uptick in activity since the start of the year.
“I don’t think this year will be as crazy as the last five were, but things are already picking back up,” he said in a Redfin report published this week. “Even as buyers return, home sellers should expect to negotiate more than they have in the past few years. The days of buyers waiving all contingencies are behind us.”
View article at https://www.mansionglobal.com/
2018 was a milestone year. According to the ATTOM Data Solutions 2018 U.S. Home Sales Report, home seller profits hit a12-year high – the highest level since 2006.
Our Market Ranked #3 in the Country
The Seattle/Bellevue/Tacoma area ranked #3 in seller return on investment for the entire country. The remaining cities in the top five were all located in California.
While the local market has softened some since the beginning of the year, it’s still a great time to sell. Sales are up and there aren’t enough homes on the market to meet demand. Buyer interest is projected to be high throughout 2019.
Read on windermereeastside.com
For many people, their mortgage is the largest expense they will ever incur in their lives. So if given the chance, it only makes logical sense you would want to pay it off as quickly as possible. On the other hand, a mortgage is also the cheapest money you will ever borrow, and it’s generally considered good debt. Any extra money you obtain could be definitely be put to good use elsewhere.
The reality is, however, a little less cut and clear. For some homeowners, paying off their mortgage earlier is the right answer. While for others, it would be far more advantageous to invest their money.
Advantages of paying off your mortgage earlier
- You’ll pay less interest: Each time you make a mortgage payment, a portion is dedicated towards interest, and another towards principal (we’ll ignore other costs for now). Interest is calculated monthly by taking your remaining balance, the length of your amortization period, and the interest rate agreed upon with your lending institution.
If you have a $300,000 mortgage, at a 4% fixed rate over 30 years, your monthly payment would be around $1,432.25. By the time you finish paying off your mortgage, you would have paid a total of $515,609, of which $215,609 were interest.
If you wanted to lower the total amount you pay on interest, you don’t need to make a large lump sum to make a difference. If you were to increase your monthly mortgage payment to $1,632.25 (a $200 a month increase), you would be saving $50,298 in interest, and you’ll pay off your mortgage 6 years and 3 months earlier.
Though this is an oversimplified example, it shows how even a small increase in monthly payments makes a big difference in the long run.
- Every additional dollar towards your principal has a guaranteed return on investment: Every additional payment you make towards your mortgage has a direct effect in lowering the amount you pay in interest. In fact, each additional payment is, in fact, an investment. And unlike stocks, bonds, and other investment vehicles, you are guaranteed to have a return on your investment.
- Enforced discipline: It takes real commitment to invest your money wisely each month instead of spending it elsewhere.
Your monthly mortgage payments are a form of enforced discipline since you know you can’t afford to miss them. It’s far easier to set a higher monthly payment towards your mortgage and stick to it than making regular investments on your own.
Besides, once your home is completely paid off, you can dedicate a larger portion of your income towards investments, your children or grandchildren’s education, or simply cut down on your working hours.
Advantages of investing your money
- A greater return on your investment: The biggest reason why you should invest your money instead comes down to a simple, green truth: there’s more money to be made in investments.
Suppose that instead of dedicating an additional $200 towards your monthly mortgage payment, you decide to invest it in a conservative index fund which tracks S&P 500’s index. You start your investment today with $200 and add an additional $200 each month for the next 30 years. By the end of the term, if the index fund had a modest yield of 5% per year, you will have earned $91,739 in interest, and the total value of your investment would be $163,939.
If you think that 5% per year is a little too optimistic, all we have to do is see the S&P 500 performance between December 2002 and December 2012, which averaged an annual yield of 7.10%.
- A greater level of diversification: Real estate has historically been one of the safest vehicles of investment available, but it’s still subject to market forces and changes in government policies. The forces that affect the stock and bonds markets are not always the same that affect real estate, because the former are subject to their issuer’s economic performance, while property values could change due to local events.
By putting your extra money towards investments, you are diversifying your investment portfolio and spreading out your risk. If you are relying exclusively on the value of your home, you are in essence putting all your eggs in one basket.
- Greater liquidity: Homes are a great investment, but it takes time to sell a home even in the best of circumstances. So if you need emergency funds now, it’s a lot easier to sell stocks and bonds than a home.
Misael Lizarraga is a real estate writer with a passion for teaching real estate concepts to first time buyers and investors. He runs realestatecontentguy.com and is a contributing writer for several leading real estate blogs in North America.
This post originally appeared on the Windermere.com Blog.
January brought more good news for homebuyers. Prices were down, inventory was up and interest rates hovered near a nine-month low. Those factors drove more buyers into the market and resulted in an uptick in sales for the month. We’ll see how this transitioning market evolves as we head into the prime Spring home buying season.
The most expensive region in King County saw prices soften in January. The median price of a single-family home on the Eastside dropped 3 percent over last January to $910,000. It’s an excellent time for buyers to leverage the cooling market and negotiate terms that work best for their needs. Last January, 39 percent of the homes in this area sold for over asking price. This January, that figure dropped to 12 percent. With its favorable business climate and high rankings for both economic growth and technology capabilities, demand on the Eastside is projected to remain strong.
January marked the first time home prices in King County decreased year-over-year in seven years. The median price of a single-family home was $610,0000, a drop of 3 percent over the prior year. Inventory more than doubled. Unlike recent months, this was due primarily to more people putting their homes on the market, as opposed to homes taking longer to sell. Despite the surge in listings there is just two months of available inventory, far short of what is needed to meet demand.
The median price of a single-family home in the city was $711,500 in January, a decrease of 6 percent year-over-year. Despite a 107 percent increase in homes for sale compared to a year ago, Seattle continues to have the tightest inventory in King County with less than two months of supply. A booming economy that shows no signs of slowing continues to draw more people to the city. The area will have to significantly add more inventory to meet that growing demand.
The median price of a single-family home in January inched up 1 percent from last year to $455,000. That price is down from the median of $470,000 recorded in December. Snohomish County also saw a surge in inventory with the number of homes on the market double of what it was last year at this time.
Read original article at www.windermereeastside.com
The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Agent.
The Washington State economy continues to add jobs at an above-average rate, though the pace of growth is starting to slow as the business cycle matures. Over the past 12 months, the state added 96,600 new jobs, representing an annual growth rate of 2.9% — well above the national rate of 1.7%. Private sector employment gains continue to be quite strong, increasing at an annual rate of 3.6%. Public sector employment was down 0.3%. The strongest growth sectors were Real Estate Brokerage and Leasing (+11.4%), Employment Services (+10.3%), and Residential Construction (+10.2%). During fourth quarter, the state’s unemployment rate was 4.3%, down from 4.7% a year ago.
My latest economic forecast suggests that statewide job growth in 2019 will still be positive but is expected to slow. We should see an additional 83,480 new jobs, which would be a year-over-year increase of 2.4%.
Home Sales Activity
- There were 17,353 home sales during the fourth quarter of 2018. Year-over-year sales growth started to slow in the third quarter and this trend continued through the end of the year. Sales were down 16% compared to the fourth quarter of 2017.
- The slowdown in home sales was mainly a function of increasing listing activity, which was up 38.8% compared to the fourth quarter of 2017 (continuing a trend that started earlier in the year). Almost all of the increases in listings were in King and Snohomish Counties. There were more modest increases in Pierce, Thurston, Kitsap, Skagit, and Island Counties. Listing activity was down across the balance of the region.
- Only two counties—Mason and Lewis—saw sales rise compared to the fourth quarter of 2017, with the balance of the region seeing lower levels of sales activity.
- We saw the traditional drop in listings in the fourth quarter compared to the third quarter, but I fully anticipate that we will see another jump in listings when the spring market hits. The big question will be to what degree listings will rise.
Home prices, although higher than a year ago, continue to slow. As mentioned earlier, we have seen significant increases in inventory and this will slow down price gains. I maintain my belief that this is a good thing, as the pace at which home prices were rising was unsustainable.
When compared to the same period a year ago, price growth was strongest in Skagit County, where home prices were up 13.7%. Three other counties experienced double-digit price increases.
Price growth has been moderating for the past two quarters and I believe that we have reached a price ceiling in many markets. I would not be surprised to see further drops in prices across the region in the first half of 2019, but they should start to resume their upward trend in the second half of the year.
Days on Market
The average number of days it took to sell a home dropped three days compared to the same quarter of 2017.
- Thurston County joined King County as the tightest markets in Western Washington, with homes taking an average of 35 days to sell. There were eight counties that saw the length of time it took to sell a home drop compared to the same period a year ago. Market time rose in five counties and was unchanged in two.
Across the entire region, it took an average of 51 days to sell a home in the fourth quarter of 2018. This is down from 54 days in the fourth quarter of 2017 but up by 12 days when compared to the third quarter of 2018.
I suggested in the third quarter Gardner Report that we should be prepared for days on market to increase, and that has proven to be accurate. I expect this trend will continue, but this is typical of a regional market that is moving back to becoming balanced.
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am continuing to move the needle toward buyers as price growth moderates and listing inventory continues to rise.
2019 will be the year that we get closer to having a more balanced housing market. Buyer and seller psychology will continue to be significant factors as home sellers remain optimistic about the value of their home, while buyers feel significantly less pressure to buy. Look for the first half of 2019 to be fairly slow as buyers sit on the sidelines waiting for price stability, but then I do expect to see a more buoyant second half of the year.
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the Unversity of Washington where he also lectures in real estate economics.
This post originally appeared on the Windermere.com Blog.