Category Archives: market update

2018 is NOT another 2008

People are asking if 2018 will be another 2008 for the real estate market. I emphatically answer NO! Here is why I don’t believe we’re headed for a major turn in the market.

There are many more protections for buyers/homeowners in the mortgage market. A large part of the 2008 crash was related to mortgages being given to people who could not afford those homes. The Dodd–Frank Wall Street Reform and Consumer Protection Act which was signed into law by President Obama in 2010. The Consumer Financial Protection Bureau instituted a rule that protects consumers from irresponsible mortgage lending by requiring lenders to ensure prospective buyers have the ability to repay their mortgage.

Additionally, housing starts are significantly below the need for 1.5 million units per year (top chart below). 2007 was the last year we met that goal. On the other hand, the homeownership rate is rebounding and is at its highest rate in three years (bottom chart below). These two statistics combined tell us that demand continues to outweigh supply. Our market will remain strong as long as we have the demand.

We are, however, seeing an adjustment in the market, please see last week’s post for that update.

For more information on the market or on buying or selling a home, please give me a call at 206-790-0081 or email Jamie@JamieFlaxman.com.

 

Shift in the Market?

We are seeing a shift in the market, but it’s not a cause for alarm. This shift is a balancing. We have reached the point where prices have hit the top and now they’re settling down. A recent article from CityLab.com explains it well:

“Housing prices are cooking. Across the nation, the price of homes is rising faster than the rate of inflation—in some places by a factor of three. That’s true of high-cost cities such as Seattle and San Francisco and lower-cost cities such as Charlotte and Tampa alike. And the overheated market for homes is costing the middle class the American dream.

Nationwide, the price for homes is approaching the zenith seen in 2006, just before the market fell into a foreclosure crisis and the economy sank into the Great Recession. . . 

But there are key differences between the housing peak in 2006 and the housing peak today. This surge in housing prices is not necessarily evidence for a bubble—much less any indication that a bubble is about to burst.

Late in July, the S&P CoreLogic Case–Shiller U.S. National Home Price NSA Index tracked a 6.4 percent annual gain in home prices for May 2018. This index has recorded year-over-year increases of at least 5 percent every month since August 2016—a sign of the strength of the recovery. . . . in Seattle, which saw a year-over-year price increase of 13.6 percent for May, home prices are already well above the 2006 high-water mark.

But since most workers aren’t earning 6 percent raises year after year, eventually this party has to come to an end. (Indeed, for four-fifths of privately employed workers, wages are actually falling.) Housing prices will stabilize or soften because they have nowhere else to go. The prevailing trend is unsustainable. “If something can’t go on forever, sooner or later it will end,” says David Blitzer, managing director for S&P Dow Jones Indices. With mortgage rates and prices rising, sales in both new homes and existing homes are starting to slow. ‘Either buyers have gone for the summer, because it’s too hot to look at housing, or they’re pausing to see what’s going on,’ Blitzer says. ‘If the pause continues, you’ll see sales go down.'”

And this is what we’re now seeing in Seattle. Most homes are not selling in 7 days and significantly above list price right now. I’m seeing a significant increase in price reductions and less multiple offer situations as well.

What does this mean for you? If you’re a buyer, this is all good news. It means you may be able to get into the market without a bidding war and having to look at homes significantly below your price point.

If you’re a seller, it’s not a time to panic. This shift is actually creating a healthier market. You probably will get less for your home than if you listed 6 months ago. But you probably will still have significant profits if you sell as prices are at record highs. We still have a significant shortage of housing so even with the increased inventory, demand still outweighs supply. Inventory levels are still under 2 months which means it’s a seller’s market – a balanced market would be 4-6 months, and a buyer’s market would be greater than 6 months.

As I’ve said often, there’s no crystal ball in real estate. In my predictions for 2018, I said price increases would slow down. In fact, year over year prices are still up about 11%. I also predicted interest rates would hit 5% before year-end; we have already hit this number which is reducing buying power for buyers.

If you’re thinking of buying, this is the time to get pre-approved and start your buying process. If you’re a seller, I’d be moving quickly to get your home on the market while prices are still at the peak. Please call me at 206-790-0081 or email me at Jamie@JamieFlaxman.com for a complimentary market analysis for your home.

Most Homes Sell At or Above List Price

Hot off the press, here are some highlights of the May housing market:

  • The median sales price for a single family home in Seattle in May was $802,000. For condos it was $529,500. Combined, we saw a 17.3% increase in the median sales price from May 2017.
  • Inventory improved in May and for the first time in a long time, we have more than 1 months supply of housing (1.1 at the end of May). There’s still a long way to go to get this to the 4-6 months necessary for a balanced market.

The most impressive statistic for May is this one – 84% of properties sold at or above list price! (26% sold at list, 58% above.) That tells us that it is likely that 6 out of 10 listings received multiple offers.

If you’re a seller, it’s the time to sell. If inventory continues to increase, we may start seeing smaller increases in sales prices and less competition. If you’re a buyer,  let’s get you into a home.

Give me a call/text at 206-790-0081 or email Jamie@JamieFlaxman.com and let’s talk about your real estate needs.

April Inventory Report

Spring is here and there are more homes coming on the market!!! While we did see an increase in listings in April over April 2017, we still have a severe shortage of properties for sale. If you’re considering selling, now is the time to talk. Give me a call/text at 206-790-0081 or email and find out what your home is worth today.

Tri-County Market Report

March statistics from the Northwest Multiple Listing Service were released last week and showed that we are continuing to see substantial price increases.

Prices overall are up about 13.2 percent from a year ago, and even more so in the four-county Puget Sound region. Among these four counties, Kitsap had the largest year-over-year increase at 19 percent, but King County homes are still the priciest. The median price for last month’s sales of single family homes and condos combined in King County is $625,000, up 17.9 percent from a year ago. For single family homes, excluding condos, the median price for last month’s sales was $689,950. Year-over-year prices are up more than 18 percent in Pierce County and about 14.3 percent in Snohomish County.

We have returned to an extremely intense market for each new listing due to extremely strong job growth and eager buyers who want to purchase before interest rates go higher. We are witnessing high levels of sales activity intensity for each new listing coming on the market.

Until we see more inventory on the market, expect home prices to continue to increase. For more information on the market, contact me at 206-790-0081 or Jamie@JamieFlaxman.com.

March Inventory Report

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.

Getting to Sold!

Next week, on Wednesday, April 4th, I will be teaching my popular class, “Getting to Sold,” at the Greenwood Senior Center. The class is open to everyone and is not targeted to any one age group.

Getting to Sold is for anyone who is thinking about selling a home or condo. It’s a great opportunity to learn what’s going on with the real estate market and why now might be the right time to sell. I also provide tips on preparing your home for market. And we also talk about how to purchase a new property while selling your current one.

Class is April 4th, 6:00-7:30pm. Please reserve your spot by emailing me at Jamie@JamieFlaxman.com  or calling/texting 206-790-0081.

Download flyer: getting to sold flyer 2018

February Inventory Updates

Inventory (or lack of) is still the story of the greater Seattle real estate market. We did see increases in some areas but not nearly enough to address the demand. In King County the number of single family homes coming on the market increased 6.6% over February 2017 but is still down 7% from 2016; condo inventory increased 13.2% from 2017 but is down 16.9% from 2016.Seattle continued to see a decrease in inventory for single family homes compared to the two past years – down 4.7% from 2017 and 6.9% from 2016. Condos on the other hand increased significantly, a 34.2% increase from 2017 although from 2016 the number was down 15.1%. The increase in condos may be from pre-sales of a few new buildings that are in the development stages.

Moving on to Snohomish County, the number of single family homes showed an increase of 1.3% from 2017 but that is still a 16.8% decrease from February 2016. New condo listings also increased 12.7% from 2017 and also showed a 12.1% increase from 2016.

Are you thinking of selling your home this year? We’re moving into the spring real estate frenzy so let’s talk now about your plans. Give me a call/text at 206-790-0081 or email at Jamie@JamieFlaxman.com.

 

January Inventory Report

In both Snohomish and King Counties we saw an increase in inventory in January, but not nearly enough to meet the demand. I know of a home in Everett that received 27 offers and one in Seattle (Fremont) that had 18. Looking at January 2018 inventory you can see that the numbers are continuing to decrease, year over year. In King County the number of active listings at month end is down 50% since 2016, 21% from 2017; in Snohomish County it is down 81% since 2016, 30% from last year.

This is the time to sell – let’s talk about your needs. Give me a call/text at 206-790-0081 or email Jamie@JamieFlaxman.com.

Why You Should List Now!

You’ve heard it before but I can’t say it enough – we have a severe shortage of homes for sale in the Puget Sound Region. This is the number of active listings in various cities as of this morning:

For comparison purposes, in December 610 homes SOLD in Seattle, almost double our current inventory of available homes.

The number of buyers has increased substantially as well, resulting in multiple offers on most properties. Prices are continuing to increase as well.

So why should you sell now? Traditionally we see more homes for sale in the spring so get your home on the market NOW to reach out to the most buyers.

Give me at call/text at (206) 790-0081 or email Jamie@JamieFlaxman to discuss listing your home.