The frenetic pace of the real estate market continues to frustrate home Buyers while rewarding home Sellers. The data shows 13% appreciation on the eastside from last year but for those of us on the streets and in the negotiations, it's not abnormal to see prices up 20% since the beginning of this year. Bidding on homes seems to have little basis on comparable values or sales data and much more to do with capturing that home, regardless of price. Business practices are challenging and changing constantly; trying to figure out if or when to delay reviewing offers; how to make counter offers; what demands Sellers can make on Buyers and what incentives Buyers can create to have their offer selected by Sellers.The pace and frustrations are dizzying.
Eastside prices are at all time highs, at just under $783,000 up 13% from 2015. Seeking affordability, Buyers have driven up the median price on condos to $345,608; that's 15% above last year at this time.
73% of homes are selling at or above asking price with an average market time of 6 days; a timeline created by Sellers and agents delaying the review of offers to allow more buyers to view the home and generate more offers. While the average and median over asking prices are only 5.13 and 3.75% respectively, anyone actively in the market knows these figures are quite often in the 15-20+% range over asking price.
A staggering statistic is that sales of $3M+ homes is up 94% over 2015; not surprisingly this is drawing more sellers and inventory has jumped 31% for homes for sale in this price range. I'd be cautious if I were a Buyer in this range as there just aren't that many folks with incomes to support future purchases in this price range. This could be a great time to be a Seller for homes in this range, while there is still optimism by Buyers. Beware though, the increased inventory can mean a decline in leverage for home Sellers in this price range relative to lower price range Sellers.
Seattle's statistics are just as bullish for home Sellers with price up 19%, to just about $637,500 and again condo sales and prices are rising for those seeking close in affordability. Median condo prices are just over $400K, up 21% from 2015. Sales in the high end markets, $1-3M are up 25-36%, while inventories are declining 17-33%. The high end has lower overall price points than the Eastside but shows a very strong market in both areas, especially for homes under $2M.
What's driving this strength of market and how long will it last are constant questions I receive. Job and population growth as well as near record low interest rates are the main reasons for the why; as well as younger buyers entering the market and people who lost their homes to foreclosure or bankruptcy in the market turn down returning to buy. Rising rental rates are also forcing many to seek stability of their housing costs. Average house payments are a lower percentage of incomes for most buyers than rental rates. So why not own if you can find a home you like and pay less to own it that rent it.
How long this lasts? This is always the $64M question. Some economists predict our region could see this strength continue to 2021; not to the degree of the last year but still 4-5% per year as our local economy continues to thrive and our population grows. Until we see more folks retiring and leaving their homes and/or the area, something that was postponed by many with the economic downturn, This should increase home inventories and likely lessen local demand but we need a lot of inventory to make that happen and I don't see that happening too soon. New construction is increasing but much more so in the suburbs and further out ex-urbs; still in-fill lots and small subdivisions are increasing. Any inventory increase is welcome.
So, if you're a home Seller, it may be time to capitalize on near peak values. While the market may continue upward, the bulk of gains may be had and uncertain economic conditions could reverse this quickly. If you're home Buyer, stay vigilant and diligent. Hopefully the typical July to August slow down in sales will come back for this year, along with modest gains in selection and help you find your new home.
Real estate is almost always discussed and much more useful information derived from local figures but it can be nice to see how various parts of the country are doing for comparision. The below graphic is an interesting chart to show you overall figures. Not great to compare Seattle to Spokane or Portland to San Francisco but it's still nice to see how the figures stack up for sales volume and average price changes. This trend of increasing sales and prices is expected to continue this year and I expect into next year. If you're interested in your local market conditions or comparisons, please let me know.
I'm not normally a fan of national statistics about real estate as they tend to create confusion or become more or less irrelevant but there is some information in the below artice from a New Englad Real Estate Comapny and blog source, Keeping Current Matters, that I think offers some actual relevance.
When or why someone will move is fairly universal, so the reasoning and percentages of people who fall in these categories is likely applicable to you. More important is the year over year value changes of real estate in different states around the country. Within any given price range, property type and city of a state the numbers aren't so relevant but for comparison sake on overall values, it can help you see if postponing or making that move to or out of any given state makes more sense and an overall comparision between states for value changes.
Again, keep any specific city or neighborhood value separate as these vary widely. By some statistics you can see or say that California is still 14% below peak pricing levels, but then other statistics will show you that most of the Bay area prices are 10% over their prior peaks. We have similar stories and variations in the Seattle marketplace. I thought you might like this simple map for comparative ideas, maybe to help you plan your retirement or future employment destinations.
Posted: 16 Mar 2015 04:00 AM PDT
A recent Demand Institute report revealed “nearly half of all American households plan to move at some point in the future.” Seventy-five percent of those surveyed in the report cited one or more ‘location-related reasons’ for their eagerness to move. Here are the top 5 reasons:
1. Safer Neighborhood – 30%
2. Closer to Family – 27%
3. Change of Climate – 26%
4. Closer to Work – 25%
5. For a New Job – 23%
While the majority of Americans (74%) will move within their home state, for the 26% planning to call a new state home, it is important to know that prices in each state are appreciating at different rates and waiting to buy or sell your home could cost you more in the long run. The map below was created using the FHFA’s latest Home Price Index and shows year-over-year price gains in each state.
If your plan for 2015 includes relocating to a new state, meet with a local real estate professional in that area who can help you find the best fit for you and your family’s needs.
While I'm not too familiar with this new label of Normcore, I certainly understand and have seen this shift in the mindset of many newer, younger home buyers. The idea of simpler, more open floor plans and home designs; of less ostentatious home styles and being in homes different from their parent's designs or architectural layouts of the past 30 or so years is desirable. The following article from Realty Trac shows some cities around the country where these home styles are more prevalent. While only Lynnwood made the list in our area, these home styles can be found in many neighborhoods in our region. If you want assistance locating them, feel free to contact me for guidance and assistance in locating them.
Want to catch up on market statistics in the various Eastside neighborhoods of Seattle? Here's a good link to see some statistics that may help you. If you'd like to discuss more specific data to assist you in your real estate decisions, let me know and I'd be happy to talk with you and share more information to assist you.
The following link shows Realtor Agent feedback, input and confidence in various aspects of the real estate market across the country. Local agents are polled on these various questions and aspects and then these answers, from approximately 50,000 agents are compiled to create these statistics and predictions. It's quite detailed and lengthy so here's some summary points:
1. Most areas of the country are seeing a strong rebound in sales and varying degrees of rebounds in prices, depending on locations, proprety types and price ranges.
2. Confidence is high that the rebound will continue in most areas
3. Housing inventory is shrinking to near harmful amounts in many parts of the country, especailly along the west coast.
4. Sales are up, even with the shrinking inventory and overall home ownership rates declining. There's some interesting dialogue on this last point towards the end of the article.
5. Builders are confident but still behind the market for building homes to meet demand.
6. Relocation accounts for 10-14% of sales and international sales, buyers living out of the country account for appx. 3% of sales. Investors are buying more of the foreclosure homes; some to hold and rent, others to flip. Rental rates are continuing to rise but to varying degrees across the country and price ranges. 3-5% are the general ranges for rental rate rises.
Here are a few articles I found interesting reading this week; somewhat dry but good data information for our region's continued growth and a hotspot for economic recovery in the US.
Seattle Market Review by the Seattle Times:
Gardner Economics Weekly Forecast: