2019’s Housing Market Is Likely to Be Stronger Than We Thought—Here’s Why

Despite a real estate slowdown gripping the nation, this year’s housing market is expected to be busier than realtor.com® economists originally predicted late last year. That means more home sales—and higher prices—are on the way.

The anticipated uptick in activity is due to lower mortgage rates, which make homes more affordable for buyers. The economic team expected rates to climb to 5.5% in 2019, but instead they have hovered around 4%. (They were 4.17% on 30-year, fixed-rate mortgages as of April 18, according to Freddie Mac data.) Economists say rates are now likely to rise a little to 4.5%, still well below what buyers were dreading.

However, it’ll be nothing like the feeding frenzy of recent years.

“It’s still going to be a lukewarm year for the housing market,” says Chief Economist Danielle Hale of realtor.com. “We’re going to see higher prices and slightly higher home sales than we expected. But home sales are still going to decline slightly as a result of the housing slowdown. There’s a gap between what sellers are looking for and buyers are hoping to pay.”

While a single percentage point difference may not seem that significant, it can add more than $100 to the monthly loan payment on a median-priced home of $300,000. (This assumes buyers put 20% down.) That can translate into tens of thousands of dollars over the life of a 30-year loan.

The downside for buyers—and upside for sellers—is that prices are expected to rise more than Hale’s team originally forecast, going up 2.9% in 2019 instead of 2.2%. That’s because the swelling ranks of buyers motivated by those lower mortgage rates will increase demand—and therefore prices.

Meanwhile, realtor.com’s economists predict the number of home sales will almost hold steady, dipping just 0.3%. They originally believed the number of sales would fall by 2%.

The market has slowed down from previous years because sellers, seeing an end to the good days of high prices, rushed to put their homes on the market. But this happened at the same time that many buyers backed off because of those same high prices. The glut in supply led to lower price growth and fewer home sales.

But as always, local conditions will be the main factor for real estate in your market, Hale says.

“In some markets there’s still not enough housing available, so buyers are likely to find a competitive market,” she says. “But in some markets prices are so high that buyers are choosing to be patient and sit on the sidelines.”

This post originally appeared on Realtor.com.

Posted on May 30, 2019 at 8:05 am
Sandy Nicholls | Category: Housing Market News | Tagged , , , , , , , ,

Market Update – December 2018

The real estate market continued to improve for buyers in November. Interest rates dropped slightly, price increases slowed and inventory soared. It’s important to note that inventory increases, while significant, are being compared to the record low supply of last year. We’re still far short of the inventory needed for a truly balanced market, however buyers have greater choice and less competition than they’ve had in years. Sellers who price their home according to current market conditions continue to see strong interest. Heading into the holiday season, there’s something for everyone to celebrate.

Eastside

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The Eastside economy continues to be very strong. Heavy investment in commercial construction from companies such as Vulcan boost expectations that the area will continue to thrive. The median price of a single-family home in November hit $885,000 on the Eastside. Although an increase of 4 percent from a year ago, home prices have remained steady since this fall. With continued demand and only 2.4 months of inventory, the market has a long way to go to becoming balanced.

King County

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Price increases continued to slow in King County. The median single-family home price was $643,913 in November, an increase of 2 percent over a year ago. South King County, where the most affordable homes in the county are located, saw significantly greater increases compared to a year ago. North King County also posted greater increases than the county overall. Inventory has skyrocketed as the number of homes for sale in King County more than doubled year-over-year. While that’s good news for buyers, there is only 2.1 months of available inventory in the county, slightly down from October and not nearly enough to meet demand.

Seattle

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The median price of a single-family home in Seattle was $760,000 in November. This is up 3 percent from a year ago and slightly up from October. Inventory jumped 177 percent year-over-year however, at just two months of supply, the Seattle area has the tightest inventory in King County. With the city’s strong economy and lifestyle appeal, that’s not expected to change any time soon. Forbes recently named Seattle as the best place for business and careers in the nation. U.S. News & World Report ranked the University of Washington among the top ten universities in the world with Money Magazine rating Seattle the #5 Best Big City to Live In.

Snohomish County

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Inventory in Snohomish County continued to climb, surging 88 percent in November as compared to a year ago. That said, the area has fewer homes for sale than King County with just 1.8 months of inventory. This is still far short of the four to six months of supply that is considered a balanced market. The median price of a single-family home sold in November was up 6 percent from last year to $470,000, virtually unchanged from October.

This post originally appeared on the WindermereEastside.com blog.

Posted on December 13, 2018 at 10:00 am
Sandy Nicholls | Category: Home Buying, Housing Market News, Local Market Updates, Selling Your Home, Uncategorized | Tagged , , , , , ,

Where Are Home Prices Headed?

The Home Price Expectation Survey checks in with over 100 national real estate experts every quarter, including Windermere Chief Economist Matthew Gardner. Here’s where they think prices will go:

Gardner predicts our local market will fare better than the nation overall.

“As I look to 2019, I believe home prices in King County will increase 7.8% over the current year.”
– Windermere Chief Economist Matthew Gardner

“The local economy will continue to grow and that will drive demand for ownership housing,” according to Gardner. “Supply will slow during the holiday season before we see a new influx of listings in the spring. With more supply, I believe that home price growth will continue to slow, but values will still increase.”

Whether you’re thinking of buying or selling I can provide you with market data that will help you make the best decision for your circumstances.

This post appeared on the Windermere Eastside Blog.

Posted on December 4, 2018 at 1:04 pm
Sandy Nicholls | Category: Housing Market News, Local Market Updates, Selling Your Home, Uncategorized | Tagged , , , , ,

How Interest Rates Affect Buying Power

Whether you are thinking about buying or selling a home, interest rate trends are an important factor to consider. Mortgage interest rates have been rising and experts, including Windermere Chief Economist Matthew Gardner, predict that they will continue to increase in 2019.

Interest Rates and Buying Power

The chart below shows the impact rising interest rates would have if you planned to purchase a $675,000 home while keeping your principal and interest payments at $3,500 a month.

Every time interest rates increase by a quarter of a percent, your buying power decreases by about 3 percent.

What this means for buyers:

With prices moderating and interest rates slated to rise again, now is a good time to buy. If you’re betting on prices falling, you need to consider the strong possibility that an increase in interest rates would offset any potential price savings.

What this means for sellers:

Listing your home now means you will attract a larger buyer pool before interest rates rise.

Whether you’re thinking of buying or selling our brokers can provide you market data that will help you make the best decision for your circumstances. 

This post was originally on the Windermere Eastside Blog.

Posted on October 25, 2018 at 9:02 am
Sandy Nicholls | Category: For Your Home, Home Buying, Housing Market News, Local Market Updates, Selling Your Home, Uncategorized | Tagged , , , ,

Local Market Update – September 2018

 

The number of homes for sale in August increased dramatically over the same time a year ago. This is the result of a moderate increase in new listings and a much slower pace of sales. Homes are staying on the market longer, giving buyers more choices and more time to make an informed decision. While home prices are up compared to a year ago, the rate of increase was in the single digits rather than the double-digit surges of past months. It’s still a seller’s market, but sellers need to have realistic expectations about pricing their homes as the market softens.

Eastside

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The median price of a single-family home on the Eastside was up nearly 10 percent from the same time last year to $935,000. Home prices have declined each month from the all-time high of $977,759 set in June. Inventory increased 73 percent over last August. With supply soaring and home prices moderating, sellers need to work with their broker to price their home to meet the current market conditions. A year ago 47 percent of the homes on the Eastside sold for over list price. This August that number was down to 29 percent.

King County

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King County experienced yet another flood of inventory with the number of homes for sale jumping 65 percent over the previous year. Despite the growth, the county has just 1.9 months of inventory and remains a seller-oriented market. The market has slowed but it remains fast-paced, with 62 percent of the properties here selling in fewer than 15 days. While home prices were up 3 percent from a year ago, the median price of $669,000 represented the third straight month of declines from the record-high of $726,275 reached in May.

Seattle

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After leading the nation in home price growth for nearly two years, Seattle is finally cooling off. The median home price in August was $760,000, up just 4 percent from last year and down from the record $830,000 reached in May. Inventory soared in August, but the city still has just two months of supply, far short of the four to six months that is considered balanced. Bidding wars are becoming less common and price drops more common. Sellers must adjust their expectations to what appears to be a long waited moderating of the market.

Snohomish County

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Mirroring the market slowdown in King County, Snohomish County also experienced a cooling off in August. The median price of a single-family home was $492,000, up 8 percent from a year ago but down from the record high of $511,000 two months prior. Inventory increased nearly 30 percent, but at just 1.6 months of supply the market remains very tight and sales are brisk. Sixty percent of homes here sold within 15 days.

This post originally appeared on the WindermereEastside.com Blog.

Posted on September 12, 2018 at 10:56 am
Sandy Nicholls | Category: For Your Home, Home Buying, Housing Market News, Local Market Updates, Selling Your Home, Uncategorized | Tagged , , , , , , , ,