Tag Archives: market update

Wow, What a Crazy Market We’re In!

When will it stop? Not until there’s a lot more inventory. With such a significant shortage of available homes, sellers rule the market, and homes are selling at incredible speeds for record prices. And this isn’t just for Seattle and King County, it’s happening in Snohomish, Pierce, and Kitsap Counties too. King County buyers, unable to buy because of low demand and higher prices, are moving to the outlaying counties.

The median price of single-family homes sold in King County hit $480,000 in April, just $1,000 shy of the peak set in July 2007 before the housing bubble burst. April’s median price was 9 percent higher than in March and 11.5 percent higher than a year ago, according to data from the Northwest Multiple Listing Service.

But don’t worry, this isn’t another bubble waiting to burst. While, the annual price gains and bidding wars may echo the bubble years, there’s a crucial difference, according to the experts. The run-up in prices this time is fueled by job growth, new demand from foreign buyers and millennials, low interest rates, and a severe housing shortage.

Just check out the numbers for Seattle. In April, there were 630 homes on the market, 745 homes sold, and 949 homes went pending (into contract).

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And the median price in Seattle for sold homes hit $540,000, up 5.9% from March and 18.4% from April of last year. As an example of the current frenzy, in April a home in Wallingford was listed for $725,000, received 25 offers, and closed at $913,000 (125% of list price).

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For more information on the market or to discuss listing your home, please call me at 206-790-0081 or email at Jamie@JamieFlaxman.com.

December “One of Best on Record”

Here’s the Northwest Multiple Listing Service’s press release on the market for December. I’ll have further analysis for you in the next week or so. Please email or call with any questions or for further information.

FOR IMMEDIATE RELEASE Jan. 6, 2015

Local real estate leader calls December “One of best on record”

KIRKLAND, Washington (Jan. 6, 2015) – Real estate brokers around Western Washington reported a strong finish to 2015. December’s sales outpaced the same month a year ago by double digits, according to new figures from Northwest Multiple Listing Service.

“December was one of the best Decembers on record,” observed J. Lennox Scott, chairman and CEO of John L. Scott Real Estate upon reviewing the latest statistics from the listing service.

MLS members reported modest year-over-year price gains (about 5.5 percent) for homes and condominiums that sold last month compared to 12 months ago. The number of new listings added to inventory was nearly identical to activity of a year ago, but with pending sales outpacing new listings, the selection, as measured by total active inventory, dwindled by about 8 percent compared to a year ago.

Commenting on the combination of scarce inventory in some areas and expectations of rising interest rates, the head of one large real estate company advised, “Anyone thinking of buying a home should do it early in 2015!”

“Prices, interest rates, and rents will continue to rise,” stated Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate in Seattle. “The cost of buying a home is not determined by price alone but by price and the mortgage rate,” he explained, adding, “The longer a buyer waits, the higher the mortgage payment as prices and interest rates continue to increase.”

Many buyers appeared to heed Gain’s advice during December. MLS members reported 5,794 pending sales (mutually accepted offers) for an increase of nearly 11 percent from the year-ago total of 5,224 pendings. In the four-county Puget Sound region, brokers notched 4,410 pending sales, the highest December volume since 2005.

High-end homes are selling well, according to brokers and MLS data. “Above the one million dollar price point in King County, we have seen back to back years of very strong sales activity,” commented Scott. Northwest MLS figures show nearly 2,000 homes priced at one million dollars and up sold in King County during 2014. That’s up more than 25 percent compared to 2013.

For more modestly priced homes, first-time and move-up buyers are taking advantage of loosening lending standards.

“It’s much easier for purchasers to qualify for a loan now than it was just a few months ago,” reported Gain. “The much needed 3 percent down payment loans are finally back for qualified purchasers,” he noted, adding, “This will allow more first-time buyers to break into homeownership.” Northwest MLS director John Deely agreed the new low down payment loan programs and mortgage rates are a boost to activity.

“In December our brokers experienced high open house traffic and strong demand from buyers as listing inventory declined,” reported Deely, the principal managing broker at Coldwell Banker Bain in Seattle. “Buyers are determined to take advantage of the continued low interest rates and to make their move sooner rather than later,” he added.
George Moorhead, designated broker and owner at Bentley Properties, reported market activity stayed steady all the way into New Year’s. “If this level of activity continues, we will see yet another sellers’ market as inventory drops,” suggested Moorhead, who is also a member of the Northwest MLS board of directors.

MLS figures show there were 4,367 new listings added to inventory during December, about the same as a year ago when members added 4,333 homes to the selection. At month end, there were 17,659 homes and condos for sale. That’s down nearly 8.1 percent from the year-ago inventory of 19,214 active listings.
Brokers are reporting tight inventory in several neighborhoods, particularly around job centers.

“Buyers barely slowed down long enough to take a break for Christmas,” said Windermere Real Estate president OB Jacobi. “All this sales activity has eaten even further into already low inventory levels.”

MLS figures show about 2.8 months of inventory system-wide. Of the 21 counties in the monthly statistical report, King County has the tightest inventory, with only 1.4 months of supply. Snohomish County was slightly better, with about 2.2 months of supply. Six months is typically considered a healthy balance between supply and demand.
Jacobi noted many Seattle neighborhoods have less than a month’s supply, increasing the competition among buyers.

Prices climbed nearly 5.5 percent from a year ago, rising from an area-wide median selling price of $275,000 to last month’s figure of $290,000. That matches the price reported for October’s sales, a figure that was only surpassed in July when the median sales price overall was $300,000.

Some MLS members, including Diedre Haines, expect similar increases this year.
“While some recent reports indicate a cooling of appreciation in 2015, unless more inventory hits the market, I anticipate the percentage increases to be about the same as 2014 due to sustained demand,” said Haines, who is Coldwell Banker Bain’s principal managing broker for South Snohomish County.

Haines, a past board member at Northwest MLS, cautioned sellers about unrealistic pricing. “It is well worth repeating that if sellers are serious about getting their homes sold, it is not a good idea to ‘go fishing’ even though there may be high demand,” she advised, adding, “Buyers are serious about making a purchase, but they are in no mood to play games as they are very well educated regarding price. If the house is overpriced – even by a small amount – buyers will simply not make offers,” she emphasized while urging sellers to heed the advice of their agent.

Brokers also stressed the importance of a home’s appearance. “Homes need to be in the best condition possible, de-cluttered, including cupboards and closets, cleaned, especially carpets and floors, freshly painted, and attractively staged,” advised Haines. “The outside appearance needs to be in top-notch condition and have the best ‘curb appeal’ possible. These factors are vitally important in obtaining the best and highest price,” she added.

Looking ahead, brokers believe many factors signal a continuing housing market recovery. For example, Mike Gain, a past chairman of Northwest MLS, points to Fannie Mae’s recent National Housing Survey. Its research shows 44 percent of consumers say now is a good time to sell a house, an all-time survey high. Nearly two-thirds of survey respondents (65 percent) say now is a good time to buy. “These results and attitudes will drive a healthy housing market in 2015,” Gain believes.)

Download the full press release here: News Release Dec. 2014

Happy New Year!

Here’s to a happy and healthy New Year!
May all your dreams and wishes be realized.

Stay Tuned in 2015 for:

  • 2014 Seattle market update (January)
  • Fabulous Seattle homes for sale
  • Monthly videos created by me
  • And much more

And to Start the Year Out Right, here are my predictions for the 2015 Real Estate Market:

Each year I review what has happened during the year, research what the experts say for next year, and share my thoughts on what will happen in the market in 2015.

Median Sold Prices – Home prices will continue to increase nationally by single digit numbers, between 5-6% whereas Washington State home prices will increase around 7%. Urban metro areas (such as Seattle) in high demand by millennials will see an increase probably in the double digits. Home prices in October 2014 were up by 6.4% year-over-year, after climbing 10.6% in 2013. There are still areas of very high demand and low inventory which will continue to push prices upward. However, many homeowners surveyed suggest they will sell their homes next year, increasing potential inventory and putting downward pressure on prices.

Inventory – It is a good thing that more homeowners are expected to sell their homes next year as I predict that more buyers will be entering the market for a home. Improved job markets and lower unemployment rates, along with stabilizing home prices and fewer bidding wars, will bring more buyers into the market. Buyers who left the market in 2014 due to disappointment over lost offers will return. Increased inventory and slower market time gives buyers the time they need to get financing and look at more homes. The bottom line is inventory will increase due to more sellers in the market, but I expect that buyers will be purchasing that inventory, so there won’t be big fluctuations either way.

Interest Rates & Mortgage Availability – The improving economy is a sure sign that interest rates will increase in 2015. The new rates will balance job growth and higher inflation rates. The Federal Reserve indicated it will increase the federal funds rate in 2015 (the federal fund rate has a significant effect on mortgage rates). I expect the 30 year fixed rate mortgage rate will reach 5% by the end of 2015. Government officials have also indicated that mortgage credit should become more available in the foreseeable future, which will allow more buyers to qualify for a mortgage and will allow some people to qualify for a lower-rate mortgage. The FHA is raising its loan limits for King, Snohomish and Pierce counties to adjust for rising median home prices; the loan limit in 2015 for a single-family home is $517,500, up 2.3% from $506,000 this year. Additionally, the FHA is bringing back loans with only a 3% downpayment.

Foreclosures – The foreclosure crisis is near its end. 2014 saw foreclosures down 30%. We will see a further decline in 2015 with a return to low levels.

These are just a few of the things I predict 2015 will bring us. For further information, please don’t hesitate to give me a call at (206) 790-0081 or emailJamie@JamieFlaxman.com. I would be happy to share what my 2015 predictions mean for your real estate holdings.

 

Market Update

Although the holiday period is usually slow for home sales, November activity this year was up 13.6% from November of last year, for the city of Seattle. For the 21 counties that encompass the Northwest Multiple Listing, activity was up 3% over last year. And for the four Puget Sound region counties (King, Kitsap, Pierce and Snohomish) the total of 5,220 pending sales marked the highest level for November since 2006

Lack of supply continues to be the norm for the Puget Sound area, with inventory stagnant in Seattle at 1.4 months). And that number goes much lower for high demand neighborhoods such as Phinney Ridge (less than 1 week), Wedgewood (3 weeks), Magnolia (1.1 weeks), and Capitol Hill (3 weeks).

The average sales price in Seattle was up 14.6% over last year and 2.4% from October.

And interest rates remain below 4% – there is no better time to buy.

If you’d like a report for your neighborhood, please give me a call or email.

Market Update

I have been so busy over the past week that I barely have time to write this post. Any question about how hot the market is? Here’s a story for you. Yesterday I submitted an offer on behalf of a client for a wonderful Phinney/Greenwood home. There were 9 offers including ours, and I believe all but one conducted pre-inspections. As one of the other brokers submitting an offer said, it was going to be a “blood bath.” Many of the offers had escalation clauses – and boy did it escalate. I can’t disclose how high it went until after the transaction closes, but my buyer did not have the highest – we came in 3rd. The offer that had the highest dollar amount had weak financing and wasn’t willing to do anything to change the financing situation; the next offer was only a few thousand more than ours but also had weak financing. MY CLIENT GOT THE HOUSE because she had strong financing (30% down and the lender talked with the listing agent) and my buyer was willing to come up a few thousand dollars more.

The bottom line. Financing is as important as price. And who the lender is may make a difference. My client’s lender was willing to go above and beyond to advocate for the client. On-line lenders and big banks often won’t do this. With them, you’re just one of hundreds of mortgages – personal relationships make a difference.

The bottom line. The market is still hot. A colleague had 11 offers on another listing. Inventory is low demand is still high.

Contact me at jamie@jamieflaxman.com or 206-790-0081 to discuss putting your home on the market or buying a home.

 

Seattle Market Update

The Puget Sound housing market picked up in May with greater inventory, but demand is still very high. Most new listings are receiving multiple offers with many significantly escalating above list price.

The chart above shows activity in the city of Seattle for single family homes and condos combined. The number of homes for sale increased 14.3% over April, but the level was slightly below that of a year ago. The number of sales closing was up 4.4% over April but down 12% from a year ago.

While less homes are selling, prices are up over last year. Combined single family homes and condos in Seattle are up 4.4% over a year ago. On average homes sold at 100% of list price.

Inventory remains extremely low, at 1.4 months worth in May. That is, if no homes came on the market, the current inventory would be gone in about 6 weeks. In May last year that inventory was at 1.2 months.

However, when you look at specific neighborhoods, the numbers can be dramatically different. For example, Wallingford, a high demand neighborhood. Prices on sold homes and condos were up 8.2% from a year ago, with an average sales price of $620,000. Homes in Wallingford average a sales price of 105% of listing price. And inventory in Wallingford was at 0.7 months in May, approximately 3 weeks worth.

For further information, please give me a call or email. I’m happy to provide you with a market update for your neighborhood or city.