Header Image

Year in Review and Predictions for 2019

There were three themes that drove the real estate market in 2018—Supply, Demand, and Affordability. Although these are always at play, the increased pressure from all three were intense in 2018 and will continue throughout 2019. Let’s look at what makes up each of these areas and how they will impact the market in 2019. Our market did cool down in 2018, but not to the extreme that you may have heard in the media. In fact, as we look at year over year statistics from 2017 to 2018, prices were up 8.1% in King County and 10.1% in Snohomish County.

The big change we saw was an increase in inventory, yet we are still solidly in a sellers’ market with inventory at 1.7 months in King County and 1.5 months in Snohomish. A sellers’ market has less than 4-6 month in inventory.

As we look at Supply, Demand, and Affordability with these statistics in mind, we see that affordability is the most significant factor at play.

Supply – There are only three ways we get new inventory – existing resale homes, new homes, and foreclosures. The number of years we are staying in our homes has reached an all-time high of 10 years which is one of the main contributors to the inventory shortage (plugging up the resale pipeline). However, another contributor – and this is a big one – is the continued lack of new construction. We also don’t have many foreclosures to add to our inventory levels. Therefore, all three inventory supply sources are drying up instead of flowing.

Demand – Our economy is humming along. Unemployment is at almost historic lows, GDP is up, Consumer Confidence is up and Millennials are ready to buy. Therefore, demand has been high and will continue to be so. If it wasn’t for the affordability issues we are experiencing, Millennials would be buying up a storm.

Affordability – High demand for housing is causing prices to soar out of a comfortable price range for buyers. The cost for builders to build (land, labor, materials, and regulatory demands) are all rising at a pace that makes new construction less affordable. Interest rates are on the rise. All of these factors affect affordability and home sales.

These three factors are in a push-pull relationship which was very evident this past year when home prices peaked in May. The market then quickly reacted with an adjustment in inventory. There was an initial surge of new listings concurrent with a moment in which buyers had had enough and affordability reached a tipping point. That surge caused buyers to step back and assess the situation instead of moving forward, which caused another moment in which sellers were ready to sell but buyers were no longer willing to pay the inflated prices. Buyers figured out quickly that the market had hit its peak and they did not want to buy at the peak of the market. This led to even more inventory coming on the market with demand pausing as supply surged. Now that surge is receding – sellers who couldn’t get the price they wanted are taking their properties off the market and savvy buyers are working with sellers, allowing both parties to make their next move.

What can we expect in 2019?:

Housing Inventory – I believe the inventory surge that we will begin the year with will be absorbed as sellers get realistic about their prices or take their homes off the market. We will then see the spring and summer return to a more reduced inventory market. I expect buyers to also hop back into the market, trying to capitalize on interest rates that are expected to rise throughout 2019.

Housing Starts/New Construction – Our builders have not been able to keep up with the demand for new construction. Historically, we have needed 1.5 million units each year. That has recently increased to 1.62 million units. However, we are only on target to build 1.25 million units this year and next which means we are continuing to add to our deficit. Local issues in many areas such as zoning and water rights are also capping new construction opportunity. The cost of building supplies, labor, land, and regulation are causing problems for our builders and I expect these problems to worsen in 2019.

Home Price Growth – In Western Washington, we saw year-over-year median sales price grow 9.1% to $409,752, according to the Northwest Multiple Listing Service (NWMLS), and you can see from the charts on page 1 and this page how prices changed in King and Snohomish Counties as well as Seattle and Edmonds. Since I expect the pace of our market to downshift after the spring (with more balanced inventory than last year), I predict that median sales prices will continue to grow but at a smaller pace.

Interest Rates – The Federal Reserve has been trying to return the country to neutral for interest rates. The Fed raised interest rates in December but said they are not sure what they will do in 2019. I do expect that rates may rise as high as 5.75% by year-end. Rates had been as high as 4.94% last November for a 30-year fixed rate mortgage, but the rate slid back and as of December it was at 4.63%.

There are several “wild card” issues in 2019 which could affect the real estate market in a way that cannot be foreseen. Issues such as immigration reform, political uncertainty, the national debt, global issues such as Brexit, possible trade wars, and even the true impact of the tax reform changes may cause shifts in the real estate market that are unpredictable. That being said, I am excited for what 2019 has in store!

For additional information and how these issues may affect you, please call or text: (206) 790-0081 or send an email to Jamie@JamieFlaxman.com.




On-Line Security

I recently have had several credit cards compromised. On one, there were fraudulent charges. On another, someone called in to the credit card company and was able to be approved as an additional authorized user and was sent a credit card. This last one has scared me. The person who called in knew enough about me to convince the person at the bank that they were me. They knew my social security number (or at least last 4 digits) and my birthday.

So much information is online – someone could probably figure out my best friend’s name (from Facebook), where I was born (by searching public records), what high school I went to (again from Facebook), my mother’s maiden name (also in public records), and a host of other words I would use in security questions.

Here’s what I’m doing to protect myself.

  • Changing my user name and password on all websites
  • Making up a new BFF
  • Talking to the credit bureaus about protecting my ID
  • Making sure my privacy settings on Facebook and other social media sites are at the highest level possible
  • Purchasing a new wallet with RFID protection

If you have other ideas of things I or others can do, please let me know.

When you go to buy a home, your credit is critically important, don’t let it get messed up by people affecting your accounts. If you’d like further information, please call me a (206) 790-0081 or email Jamie@JamieFlaxman.com.

How Much Is My Home Worth

While we may have seen some lower prices in 2018, the following chart shows that we have had significant appreciation in the housing market in Seattle, King County, and Snohomish County since 2006. In King County prices have appreciated approximately 70%, Seattle 80%, and Snohomish County 51%. If you’d like to know appreciation rates for your community or would like a market analysis of your home, please reach out to me at 206-790-0081 or Jamie@JamieFlaxman.com.

The Danger of Waiting

Affordability is one of the major factors driving our real estate market. We saw an increase in interest rates in 2018 from around 4.15% in January to a high of nearly 5% in November and with the year ending around 4.55%. We expect that interest rates could reach 5.75% in 2019. What does this mean if you are considering buying a home (or selling and buying a new home)?

As interest rates increase, your buying power decreases. Let’s say your lender has qualified you for a home purchase of $700,000 with 20% down. Today your monthly payment would be around $2,837 with a 4.5% interest rate. If rates rise as expected in 2019, the payment later this year at 5.5% would be $3,180, or $343/month more. Your lender may no longer qualify you to purchase a $700,000 home but instead more likely around $625,000 to keep your payment around the $2,837/month. If we see a 5% (being conservative) increase in prices this year, your $700,000 home would sell around $735,000 by year end. By waiting, you are likely to decrease the amount you can pay for a home.

If you’re considering buying a property this year, the time to move is now. Give me a call at (206) 790-0081 or email Jamie@JamieFlaxman.com so we can talk about your plans and needs. (The chart above shows you various principal and interest payments at different interest rates. However, you should talk with a lender to verify the accuracy of these numbers. I have several wonderful lenders who would be happy to speak with you.)

Down Payments – How Much Do You Really Need?

Gone are the days when anyone could buy a home with just a promise and signature. No documentation loans allowed virtually anyone to buy a house with no money down with just a simple credit check. After the mortgage meltdown, this all changed. Lenders tightened guidelines and down payments were back.

But how much do you actually need? Must you always find 20% down? The answer might surprise you; there are many ways to buy a home with less than 20% down payment.

  • 0% Down – There are still two loan programs which allow one to buy a home for no-down payment; the VA loan and the USDA loan. The VA loan requires the borrower to be a qualified service person or veteran and the USDA loan is for certain areas under the Department of Agriculture.
  • 5% Down – Conventional loans with loan limits can allow one to buy a home with as little as 5% down. These loans do have PMI (Private mortgage insurance) which can be eliminated when the loan amount falls below the 20% threshold.
  • 3 ½ % Down – FHA offers first time home buyers a good home loan for only 3.5% downpayment. Again these loans have loan limits and PMI but offer a faster entry into the housing market. Buying a home doesn’t always mean 20% loan. If you’re considering buying a new home, talk to your lender about your options.

If you’re thinking of buying, give me a call at (206) 790-0081 or email Jamie@JamieFlaxman.com. Let’s talk about your needs. I can also refer you to excellent local mortgage lenders.

Selling Your Home in the Winter

Many prospective sellers feel they should wait for spring to sell their home. They feel this way because of the seasonal downturn in the market and because homes don’t look as good without exterior flowers and plants and the general grayness of our part of the country. However, there are several good reasons to list your home during the winter. The most serious buyers will still be out there – those that need to buy because of job relocation or need different space. And inventory is at it’s lowest, giving buyers fewer choices, so your home will stand out more. Mortgage rates are increasing, so buyers may have greater buying power earlier in the year.

To sell your home in the winter, there are some key things to do. Keep your home warm and cozy – buyers need to be comfortable when they come in the house and the warmer it is, the more likely they’ll stay longer. Leave lights on and shades open to keep the home bright. Make sure the yard stays neat and the roof is clean. Stage the home and have professional photographs that show off the home at its best.

Thinking about listing your home this winter or spring. Give me a call at 206-790-0081 or email to discuss a complimentary market analysis and marketing plan for your home.

Halloween Events and Activities

It’s the time of year when the kids (and adults) dress up in fun costumes and go door to door collecting candy. Here are a few of my favorite neighborhood Halloween activities and not all involve candy.

Edmonds Halloween Extravaganza

Looking for something fun to do with the kids this Halloween. Come to the Coldwell Banker Bain Edmonds office on Sunday, October 28th, 10a-1p, for pumpkin carving and other Halloween activities. This is followed at 1:00 by a no-charge admission movie at the Edmonds Theatre where we’ll be showing Scooby Doo and the Witch’s Ghost.

Location: 108 5th Ave. S, Edmonds.

Trick or Treating

Phinney Ridge/Greenwood: On Saturday, October 27 from 12-3, visit for Trick or Treat for a cause! Children are welcome to trick or treat at participating businesses and encouraged to donate $2 or a non-perishable food item for the FamilyWorks Greenwood Food Bank to help families in need. Look for donation stations along Phinney/Greenwood, and Hunger Goblin’ posters marking businesses with treats (or tricks!).

Edmonds: Come to downtown Edmonds on October 31, Halloween, from 5:00-7:00 for trick or treating and a costume contest.

Edmonds Scarecrow Festival:The Coldwell Banker Bain Edmonds office participates in Edmonds’ annual Scarecrow Festival. This year our office decided to create our scarecrow based on the fact that October is Breast Cancer Awareness Month. The scarecrow, themed “Save Our Pumpkins,” is in the window of our office at 108 5th Ave S. Stop by and check it out, and also walk around and see the other creative scarecrows around town. Voting for the best scarecrow runs from October 16 to November 2, please go to https://scf.historicedmonds.org/register-vote/ and vote for our scarecrow which is in the Financial/Insurance/Real Estate category. We are accepting donations for the American Cancer Society during regular office hours.

 

 

 

 

 

 

 

Vote for Our Scarecrow

Edmonds has an annual Scarecrow Festival and the Edmonds Coldwell Banker Bain office needs your votes.In honor of breast cancer awareness month, our scarecrow is named SAVE OUR PUMPKINS. In addition to the scarecrow, we have information in our office on breast cancer and we are collecting donations for the American Cancer Society. Stop by the office to see the scarecrow and pick up information/make a donation at 108 5th Ave S, Edmonds.

Voting for the scarecrows begins on Tuesday, November 16 and runs through November 2. Here’s the link to vote: https://scf.historicedmonds.org/register-vote/. You will need to scroll down to the Financial/Insurance/Real Estate Business category.

Please share this with your friends, family, and colleagues.

 

What a Cutie!

 

 

 

 

What a cutie! Adorable 2-bedroom rambler in Seattle’s Maple Leaf neighborhood is now on the market for $575,000.

My colleague Andrea Fjortoft and I invite you to join us at one of three open houses or to check out the listing online.

Imagine the possibilities here – great condo alternative or bring your contractor to discuss options for building up or remodeling. This home offers 2 large bedrooms, one with an office area and large walk-in closet, and a full bath. Large living and dining rooms and the kitchen has a breakfast bar. Tons of natural light. Terraced, fully-fenced backyard including a pear tree and room for outdoor activities. Very quiet street.  Easy access to I-5, Northgate transit center, University of Washington, Sand Point, and future Northgate and Roosevelt light rail stations.

Quick Facts:

  • 2 bedroom, 1 full bathroom
  • 1,110 sq. ft.
  • 5,413 sq. ft. lot
  • Built in 1941
  • One car attached garage
  • Forced air gas heat
  • 2018 property taxes of $4,720

Open House Schedule:

  • Wednesday, October 10, 10am-Noon (hosted by Jamie and Andrea)
  • Saturday, October 13, Noon-3:00pm (hosted by Andrea)
  • Sunday, October 14, 1:00-4:00pm (hosted by Jamie)

Check out all the photos.

Download a flyer.

Contact us for a private tour or for more information:

Jamie Flaxman, Jamie@JamieFlaxman.com, 206-790-0081

Andrea Fjortoft, Andrea@FjortoftHomes.com, 206-369-6982

 

 

 

Market Update

The Puget Sound area real estate market has shown a shift over the past few months, and we’re moving toward what is considered a balanced market. A balanced market is one that does not favor the buyer or the seller and is the healthiest possible situation. Typically, a balanced market is considered one with 4 to 6 months of inventory; less than that favors the seller, more than that favors the buyer. Here are some selected inventory levels for September:

Inventory in Months King County Seattle Snohomish County Edmonds
Single Family Homes 3.0 2.9 2.4 2.8
Condos 2.9 3.9 1.7 1.3

Moving toward a balanced market is a good trend. It puts both buyers and sellers on equal footing. Mike Grady, COO of Coldwell Banker Bain, states “buyers are at long last now seeing properties that stay on the market longer. Listings that are priced appropriately, and not based on the feverish market we saw just a few months ago are still selling quickly, and home prices are still showing 8 percent appreciation year-over-year, more than double the rate of inflation.”

What does this mean to you if you’re considering selling your home? Homes are selling if they are priced properly. More than ever it means you need an experienced REALTOR who will provide you with a detailed pricing analysis based on what is happening in today’s market, not on sales from even 3 or 6 months ago. And automated values are even less reliable than they have been because they may not reflect what is happening today. When I work with a seller, I give you a detailed report and recommendation and update this report frequently to adjust for market change.

If you’re a buyer, this is a fabulous time to get in the market. With prices stabilizing and interest rates increasing, waiting might be not be a good idea. What you can afford today might be less than what you can afford next year. I can provide you with recommendations of lenders who can help you determine what your buying power is. Additionally, with the market becoming more balanced, the need for pre-inspections and waiving of contingencies is passing.

I’d love to talk with you about the market in your neighborhood and why now might be the time for you to buy or sell. Give me a call/text at (206) 790-0081 or email Jamie@JamieFlaxman.com to set up a time to chat.