Homeowners in many Washington Counties, including King and Snohomish, will be receiving their property tax bills around Valentine’s Day. Your reaction may be, “Whoa, this is high, how am I ever going to pay this bill!”
If you are 60 years or older or are unable to work due to a disability and have a household income of less than $45,000/year, there are programs to help you reduce your property tax burden. For more information or to find out if you qualify, call the Property Tax Exemption Program for your county: King County: (206) 263-2324 Snohomish County: (425) 388-3540
Or perhaps you’ve been thinking that it might be time to move, whether to a new community, a smaller home or condo, or even assisted living. I am available to help you figure out what the next steps might be. I can help you understand what your home is worth, and if it would make sense for you financially to sell. I can also help you with the “where do I move to if I sell” concern.
For further information or to discuss your real estate needs, please give me a call/text at (206) 790-0081 or email Jamie@JamieFlaxman.com.
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.
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.
It’s new from King County and you can find out so much information. Choose My Property, put in your address and then click on the blue button that says “View Proposed Taxes.” This will tell you how much any current tax levy on the ballot will affect you. Right now it’s showing info for August’s primary for Prop 1 – AFIS Property Tax Levy. For the several addresses I checked, the taxes will actually decrease from this one passing.
In Seattle and King County, we saw a slight increase in inventory over March of last year for single family homes, 3.1% in King County and 6.6% in Seattle. For condos, the number for sale in King County decreased 4.5% but increased 21% in Seattle. The Seattle increase may be because of pre-sales at buildings under construction.
Snohomish County saw a significant decrease in the number of single family homes for sale, with an 11.9% decrease. Condos for sale stayed at the same level as 2017.Lack of inventory is still driving the region’s housing market. The chart below shows 3 year inventory levels for King (green) and Snohomish (orange) Counties as well as for Seattle. The biggest decrease has been in Snohomish County as King County buyers are being priced out their market.
Please give me a call/text at (206) 790-0081 or email to learn more or discuss your options for buying or selling a property.
Almost everyone has heard of Zillow and their “zestimates.” And any homeowner knows that the county tax assessor has an assessed value for your home. Do these numbers tell you what your home is worth? The answer is emphatically NO.
The zestimate is an AVM – an automated value model. In addition to Zillow, there are many different websites that offer AVM’s. I believe Redfin now has a proprietary one, not sure about Trulia, but just google and you’ll find many.
The AVM that most real estate brokers look at is one put out by CoreLogic and we access it throughout the Northwest Multiple Listing Service. This AVM is one of the most respected and “closest” to accurate AVM’s available.
An automated model takes the information from public records about your home – lot size, square footage, bedrooms, bathrooms, neighborhood – and comes up with a price range. But the fact that it’s automated makes it not particularly reliable. AVM’s do not reflect the unique features and characteristics of your home. View? 17,000 sq. ft. lot but most of it is sloped? Public records are often wrong – King County had my house missing a bathroom.
The only way to get a true estimate of price is for a real estate broker to look at your home and then look at what’s currently on the market, what’s pending, and what’s sold and see how it compares.
Here’s an example using a house in Greenlake that closed last week (I randomly selected a listing, did not look for one to prove my message).
Listed for $635,000; sold for $702,500 – Zillow zestimate of $553,636; Realist estimate of $577,646
If you dig through Zillow’s website, you’ll find that they say their estimates are off on average about 10%. In this case, it was off by 27%. (I’m not saying Zillow is bad, it can give an idea and can show trends, but clearly this is not reliable.) The Realist estimate was also off significantly at 21%. The King County Assessor has the home valued at $440,000, which reflects how off those assessments are. The Realtor had priced it at $635,000 which was her best estimate, yet it sold 10% higher than. Our lack of inventory is driving prices up.
Bottom line, if you want to get an idea what your home is worth, ask a Realtor to complete a complimentary market analysis for you.