We’ve all seen the headlines: home sales slowing, prices dropping, inventories rising. Unfortunately, too many people are getting the wrong impression about the actual market conditions. Yes, the headlines can be stated as factually accurate, even if statistically exaggerated, but they leave out major pieces of information that must be considered.
Real estate is fundamentally driven by change; personal, economic and professional. Let’s look at the latter two first and see if there is any reason not to be excited by our current real estate market. Even in the face of the recent declines in the stock market, by all economic measures, all our economies are doing phenomenally well. Corporate profits and earnings are terrific. Company growth projections are all strong. Unemployment is at something between a 50 year and all-time low, given the growth in our population, locally and nationally. Consumer confidence and corporate confidences are at or near record highs. In our region, every major employer and many small employers are scrambling to find and lock down new employees as well as space to grow their businesses in. Start-ups, angel investors, innovators, disruptors all want to be in our local area. Our largest employers are asking for, building and tying up huge amounts of new or yet-to-be built office spaces in Seattle and our Eastside cities; to the tune of multi-million new square feet. This is besides the major remodel/expansion Microsoft is doing and the construction of the Eastside’s Spring District. With that much growth, new employers and employees will be needed and are jumping to be here.
Wages have been rising and even with some flattening of that in recent months, the present and upcoming demand coupled with our low unemployment means upward pressures and movement in wages and incomes in our area. Amazon, Apple, Google, Facebook and Microsoft are competing to keep, find or recruit top talent. Wages will be a key factor. With all of these companies increasing their presence, in huge ways on the Eastside, there is nothing but optimism to be had for local economics. Support, ancillary and spinoff businesses will continue to blossom and grow too.
So why is there concern instead of jubilation that home prices have come off their peak values? We should see this as a fantastic opportunity for anyone with a need or desire to change their housing situation. If you’d stay in your new home for the next 5+ years, then what is your real fear? Buying a house should be driven by your personal needs, not by trends. Yes, the present trend may be downward but for those with a sense of vision, you’ll see the soon-to-be increasing demand for housing in our area and the certainty of home prices rising back to and above the peaks we saw this past spring. Visionaries will also see the increasing interest rates we’ve had and will continue to see for mortgages. I’m not fearful of a major change upward on rates, but another ½ to 3/4 percent is likely by the end of next year. For our local loan amounts that’s $200-$300/month. Why not capture these savings if you can?
Headlines create fear but looking behind the headlines shows a very bright future coming our way. Current circumstances allow home owners to make contingent offers and still negotiate terms for their purchase. Prices have come down in most areas and price range by 10-15%. Yes, it’s possible they could go lower; it’s also possible you could negotiate your own offer lower. What is also likely is that the quantity of homes for sale, available options for you to call home are the best we’ve seen in 3 years. The gap between your present home and your dream home, or even next-step home, up or down, is more affordable now than it’s been in the last 2 years. Why would you be afraid to act when the opportunity you’ve been asking, even begging for, is here? Because you think the home prices may drop further? Are you selling all your stocks because their values took dramatic drops this week? Of course not. Those with vision are determining where and what to buy even further in on. That’s the same mentality and perspective you should be having with the housing market. Now, not last spring, is the time to be a buyer; even if you need to sell before you buy.
Oh, your home value has dropped so you’d rather sit still than capture a value higher than at any time except March to May of this year? You should question why you’d really want to sell. If you’re going to stay in the local area, then selling and buying off the peak prices is a great opportunity; not one to mourn you’ve lost out on.
All real arrows are pointing up for our local economic and housing trends. Don’t be afraid to step away from the herd and capture the opportunity you want; there’s never been a better time to lead your way forward. Visionaries see the true and future realities while others wait to be led by trends. Which are you?