The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. I hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.
Washington State employment jumped back up to an annual growth rate of 2.4% following a disappointing slowdown earlier in the spring. As stated in the first quarter Gardner Report, the dismal numbers earlier this year were a function of the state re-benchmarking its data (which they do annually).
The state unemployment rate was 4.7%, marginally up from 4.5% a year ago. My current economic forecast suggests that statewide job growth in 2019 will rise by 2.6%, with a total of 87,500 new jobs created.
Home Sales Activity
- There were 22,281 home sales during the second quarter of 2019, representing a drop of 4.8% from the same period in 2018. On a more positive note, sales jumped 67.6% compared to the first quarter of this year.
- Since the middle of last year, there has been a rapid rise in the number of homes for sale, which is likely the reason sales have slowed. More choice means buyers can be more selective and take their time when choosing a home to buy.
- Compared to the second quarter of 2018, there were fewer sales in all counties except Whatcom and Lewis. The greatest declines were in Clallam, San Juan, and Jefferson counties.
- Listings rose 19% compared to the second quarter of 2018, but there are still a number of very tight markets where inventory levels are lower than a year ago. Generally, these are the smaller — and more affordable — markets, which suggests that affordability remains an issue.
Year-over-year price growth in Western Washington continues to taper. The average home price during second quarter was $540,781, which is 2.8% higher than a year ago. When compared to first quarter of this year, prices were up 12%.
- Home prices were higher in every county except King, which is unsurprising given the cost of homes in that area. Even though King County is home to the majority of jobs in the region, housing is out of reach for many and I anticipate that this will continue to act as a drag on price growth.
- When compared to the same period a year ago, price growth was strongest in Lewis County, where home prices were up 15.9%. Double-digit price increases were also seen in Mason, Cowlitz, Grays Harbor, and Skagit counties.
- The region’s economy remains robust, which should be a positive influence on price growth. That said, affordability issues are pervasive and will act as a headwind through the balance of the year, especially in those markets that are close to job centers. This will likely force some buyers to look further afield when searching for a new home.
Days on Market
- The average number of days it took to sell a home matched the second quarter of 2018.
- Snohomish County was the tightest market in Western Washington, with homes taking an average of only 21 days to sell. There were five counties where the length of time it took to sell a home dropped compared to the same period a year ago. Market time rose in eight counties and two were unchanged.
- Across the entire region, it took an average of 41 days to sell a home in the second quarter of 2019. This was the same as a year ago but is down 20 days compared to the first quarter of 2019.
- As stated above, days-on-market dropped as we moved through the spring, but all markets are not equal. I suggest that this is not too much of an issue and that well-priced homes will continue to attract attention and sell fairly rapidly.
The Spring 2019 issue of Windermere Living showcases rising talents in interior design, spring refresh strategies, easy brunch ideas for your next get together and a helpful houseplant guide.
Windermere Living is an exclusive listings magazine published by Windermere Real Estate. Read the online version by clicking on the image below.
This post originally appeared on the Windermere Eastside blog.
For the first time in years, the real estate market is finally starting to deliver good news for buyers. The region experienced its third straight month of significant growth in inventory. Homes are sitting on the market longer, prices are moderating, and multiple offers are becoming more rare. Despite the surge in homes for sale, it is still a seller’s market. Inventory would need to triple to reach what is considered a balanced market.
Inventory on the Eastside soared 47 percent over the same time last year. There was a slight increase in new listings, but the jump was mostly due to homes staying on the market longer. Price drops have become more common. With buyers having more choices, sellers need to work with their broker to make sure they price their home correctly the first time. After setting a new high of $977,759 in June, the median price of a single-family home dropped to $947,500 in July. While offering some hope that prices may have started to moderate, the median is still 10 percent higher than it was the same time a year ago.
King County saw the biggest increase in inventory in a decade, with the number of homes for sale jumping 48 percent over a year ago. However, at 1.5 months of supply that’s still well below the 4-6 months of inventory that is considered balanced. The median price of a single-family sold in July was $699,000. That represents an increase of 6 percent from a year ago, but is down 4 percent from the record high of $725,000 set in April. Perceptions that the market is cooling needs to be kept in perspective. Homes here took an average of 15 days to sell.
Seattle saw inventory shoot up 60 percent over a year ago, bringing the supply to its highest level in over three years. Even with the sharp increase, much more inventory is needed to meet the demand for homes in the city and sellers may well decide to jump into the market. According to a Zillow study, more than 97 percent of homes in Seattle are worth more now than the peak level before the housing market crashed. Median home prices are 29 percent above the bubble peak level with the median price in July landing at $805,000; up 7 percent from last July and down from the record $830,000 reached in May.
Snohomish County also had double-digit increases in inventory, though not nearly as great as King County. The number of homes for sale in July increased nearly 16 percent over the same time a year ago, but inventory continues to be very tight. The median price of a single-family home rose 9 percent year-to-year to $495,000. That figure is down from the record high of $511,500 set in June. A move towards a more moderated market is encouraging for buyers and an incentive for sellers to list their homes soon.
This post originally appeared on the WindermereEastside.com Blog.
Chinese buyers continue to strongly influence our local market.
According to a report by Chinese website Juwai, the Seattle/Eastside area is the #3 most popular choice in the U.S. for Chinese buyers behind Los Angeles and New York City.
Windermere specifically targets this lucrative market.
Windermere properties are listed on the Chinese real estate website, Juwai, which has 2.6 million unique views per month from Chinese consumers who are searching purely for western properties.
- Windermere properties are listed with Luxury Portfolio International, a prestigious real estate site with a fully-translated Mandarin language portal.
- Windermere has strong ties with the China Alliance of Real Estate Agencies, which represents over 60 percent of all real estate sales in China.
- Windermere will have a prominent presence at the Luxury Property Show in Beijing, an invitation-only event hosting over 6,000 highly-targeted luxury home buyers in China.
- Windermere targets local Chinese nationals and their families and colleagues through marketing in the Seattle Chinese Times. \
Windermere agents sell more luxury homes to Chinese buyers.
This post originally appeared on the Windermere Eastside blog.
Our Eastside Market Review is now available for the third quarter of 2017.
You can read the full report online by clicking the image below.
We’re more than halfway through 2017! That means it’s time to reflect on national housing market predictions from the beginning of the year and look ahead to what we can expect for the remainder of the year. As a reminder, in early 2017 experts anticipated price growth would slow, inventory would bottom, and mortgage rates would climb.
According to Forbes, here are five things we can look out for:
1. Continued low inventory. Low inventory has been synonymous with our local market for a while, so this quote from one expert probably hits close to home for many people in the Seattle area: “I think we are OK calling it a straight up inventory crisis at this point.” According to an analysis, the current number of homes for sale is about equal to the housing supply in 1994 even though the U.S. population has grown by 63 million people since then.
2. More demand and higher prices. To follow the last point, since supply cannot fulfill demand, national home prices were up 5.58 percent through May. The current administration’s policies that could boost demand and millennial home buyers mean demand is not expected to dissipate anytime soon.
3. Lack of affordable housing. While the median value of homes in the U.S. is a relatively affordable $200,000, the median home sold for $263,800 in June. These prices are different (i.e. significantly lower) than what we typically see in our local market, but it is also common for us to see homes sell way over list price.
4. Homes will move fast. This is the effect of low inventory and high demand. The good news is there are still homes for sale. The not so good news is they go quickly. Nationally, the share of homes still on the market two months after listing is 47 percent. Again, these numbers are different for our region but the phenomenon of homes being snatched up quickly is the same.
5. Low mortgage rates. Here’s some good news! The average rate of the 30-year fixed mortgage is below the roughly 4 percent rate seen at the start of the year and at the low end of the range of economists’ forecast for the end of the year. We owe this to investor confidence in the U.S. government.
Contact me with questions about how I can help you better understand and navigate our ever-changing housing market!
The Seattle area continues to be an outlier in the national housing market. In May the price of single-family homes in the area increased by 13.3 percent year-over-year, more than double the national average. That marked the ninth month in a row in which Seattle experienced the biggest year-over-year increase in home prices. According to Curbed, there is a definite link between our hot housing market and the other defining feature of our region – the tech industry.
Reports about significant price growth in other tech hubs such as Portland, Denver, and of course San Francisco help confirm the correlation. This is because the tech industry has brought people to these cities in massive numbers – in Seattle’s case 1,000+ people per week – and they are all looking for homes in competition with locals.
Finance expert David Blitzer sums it up saying, “A larger population combined with more people working leads to higher home prices.” He goes on to say that even though U.S. home prices continue to climb and are outpacing both inflation and wages, we are not headed towards a bubble.
Suffice it to say, the tech industry is probably here to stay and people will continue flocking to our area for jobs and housing. Your best option for success in our frenzied market is working with a real estate professional. Reach out to me to talk about how I can put my expertise and the power of Windermere to work for you.
It seems like a tale as old as time. Many people are wanting to move to Seattle, but no one else really wants to leave. This leads to our favorite real estate headline for the last several years: inventory is low, prices are rising.
Seattle-based Zillow recently analyzed searches on their website and compared the location of its users with the cities in which they are searching. They used this information to create a chart of the most desirable cities based on their popularity with outsiders and current residents.
Unsurprisingly, Seattle ranked high in the category “Residents Want To Stay, Outsiders Want In” with about 70 percent of current residents continuing to search here.
What does this mean for the Eastside?
It isn’t just our breathtaking scenery and active lifestyles making the Seattle area’s population grow by nearly 1,000 residents per week over the last several years. Our strong economy and plentiful technology jobs are enticing newcomers. Some areas on the Eastside even have higher home prices and carry some pretty stiff competition.
This blog originally appeared on the Windermere Eastside blog.
When you hear of a city that is “something between an urban jungle and the classic picture of suburbia,” Bellevue may not be the first place that comes to mind. However, that’s exactly how one young couple describes downtown Bellevue in a recent article from The Seattle Times – and they aren’t the only ones.
When and how did downtown Bellevue transform into a dense, urban, mini-Seattle?
According to the article, downtown Bellevue is the fastest-growing neighborhood in the city, so much like the growth in Seattle it happened fairly quickly. Most of it has occurred over the past four years as developers have built more than a dozen new apartment projects in the neighborhood – and more are in the works. Permit data from the city shows that since the latest development cycle began in 2013, downtown has seen $800 million worth of new projects come up and $100 million more about to begin.
The current wave of projects is a little different than the last. This time the surge is mostly apartments, which are seen as a safer investment, but at least two companies are planning the city’s first new condos in a decade. Additionally, office construction in this current development cycle has added 1.5 million square feet of office space to downtown, most of which has already been leased.
Residents of downtown have been experiencing the effects of this growth and they are welcoming some changes more than others. Millennials are starting to think of downtown Bellevue as a lively, energetic, interesting neighborhood and residents and visitors have given the area high marks for safety and cleanliness. Less welcome changes include added gridlock on the roads and an increase in housing costs.
Luckily, our region is no stranger to adjusting to expansion so the future of Bellevue looks bright.
Read the full article from The Seattle Times.
Tangible signs of growth in and around downtown Seattle are everywhere, from worsening traffic and commute times to the record number of cranes dotting the skyline. So it is not surprising The Seattle Times reported there were 68 major buildings under construction at the end of 2016, which is a new high since the Downtown Seattle Association started counting in 2005. This is 17 more than the number of buildings that were underway at the peak of the previous building cycle before the recession hit.
The semiannual report spans from Sodo to South Lake Union and from Lower Queen Anne to Capitol Hill. Most projects are packed into the South Lake Union neighborhood, which may lead people to believe that the majority are offices for a certain local retail giant, but in fact about two-thirds of the buildings under construction are residential. Some are condos for purchase, but most will be rentals. In fact, according to the article “Seattle is expecting nearly twice as many apartments to open this year than in any year in the city’s history.”
Most of the other big buildings are offices (mostly for Amazon) and some are hotels, which are making a comeback downtown according to the article.
How do locals feel about these projects?
Residents are divided in their sentiments about this surge in new projects. While plenty of people support them because they are creating more apartments that could lower rent costs, others do not like how they represent a rapidly changing Seattle or the feeling that developers are getting rich at the expense of neighborhood character.
Read the full article from The Seattle Times.