Seattle-area home market heats up yet again, leading the country for 17th straight month

Seattle kicked off 2018 the same way it spent the prior year and a half, as the hottest real-estate market in the country, with no slowing down.

The cost of the typical single-family house across the Seattle metro area grew 12.9 percent in January from a year prior, according to the monthly Case-Shiller home price index, released Tuesday.

It’s the 17th month in a row that Seattle has led the country in home-price increases. That’s a record for Seattle and the longest streak for any metro area since San Francisco’s 20-month run that ended in 2001.

Fastest-rising home prices compared with a year ago

1. Seattle +12.9 percent

2. Las Vegas +11.1 percent

3. San Francisco +10.2 percent

4. Denver +7.6 percent

5. Los Angeles +7.6 percent

Source: Case-Shiller home-price index

There is, yet again, no sign that Seattle’s seemingly never-ending market surge is letting up — just the opposite.

Driven by an uptick in cost for starter homes, price growth has started to accelerate slightly again after having stayed steady at 12.7 percent for the previous few months.

And compared to just a month ago, home values grew 0.7 percent. That’s tied for the most in the country, and the biggest month-over-month increase locally since last summer.

Prices don’t usually go up that much here in the winter. Adjusting for the season, the price growth over the last month was triple the U.S. average.

The biggest jump occurred in the cheapest homes in the area — those that are generally in the outlying areas of the region, and smaller, starter homes. Those houses cost 14.1 percent more than a year ago, the second-biggest increase in four years.

The local market has been getting more and more expensive for six straight years now. Over that span, prices have soared a total of 82 percent. Since the old bubble high a decade ago, prices are up 22 percent across the entire metro area, and much more in King County.

It’s a seller’s market in the rest of the country, as well.

Las Vegas and San Francisco rounded out the top three, as they did the month before. The 11.1 percent annual increase in Las Vegas was the same as the month before, after having surged up for the last several months. San Francisco’s growth of 10.2 percent is the highest in years for the city.

Nationally, prices were up 6.2 percent, down slightly from a multiyear high reached the previous month.

The current median price of a single-family house in Seattle is at an all-time high of $777,000, while on the Eastside, it’s a record $950,000. In Snohomish County, the typical house costs a record $485,000, and in Pierce County, homes are going for $325,000, also the most ever.

Prices continue to swell as the local population surges across the metro area while the number of homes for sale has slid to the lowest level in decades, creating feverish competition among homebuyers. Total for-sale inventory across the metro area is down 20 percent just in the past year, which is double the national decline, according to Zillow.

 With the spring homebuying season gearing up, there should be an uptick in new listings in the coming weeks, and with it, more buyers coming out of the woodwork. Prices typically rise in the spring, and brokers are expecting more of the same this year.

The only good news for buyers is that mortgage interest rates have started to level off after trending up in the previous couple of months. The average 30-year fixed rate in Seattle on Tuesday was 4.3 percent, the same as it was at the beginning of March.

But that’s still up from 3.8 percent at the start of the year and is the highest interest rate in four years. The higher rates have added $65,000 to the long-term cost of a mortgage loan on the typical Seattle house.

Rosenberg, Mike “Seattle-area home market heats up yet again, leading country for 17th straight month” Seattletimes.com, Seattle Times March 27, 2018 https://www.seattletimes.com/business/real-estate/seattle-area-home-market-heats-up-yet-again-leading-the-country-for-17th-straight-month/
Posted on March 28, 2018 at 3:51 pm
Emerson DeOliveira | Category: Normandy Park, Real Estate News | Tagged , ,

Western Washington Real Estate Market Update

ECONOMIC OVERVIEW

The Washington State economy added 104,600 new jobs over the past 12 months. This impressive growth rate of 3.1% is well above the national rate of 1.4%. Interestingly, the slowdown we saw through most of the second half of the year reversed in the fall, and we actually saw more robust employment growth.

Growth continues to be broad-based, with expansion in all major job sectors other than aerospace due to a slowdown at Boeing.

With job creation, the state unemployment rate stands at 4.5%, essentially indicating that the state is close to full employment. Additionally, all counties contained within this report show unemployment rates below where they were a year ago.

I expect continued economic expansion in Washington State in 2018; however, we are likely to see a modest slowdown, which is to be expected at this stage in the business cycle.

HOME SALES ACTIVITY

  • There were 22,325 home sales during the final quarter of 2017. This is an increase of 3.7% over the same period in 2016.
  • Jefferson County saw sales rise the fastest relative to fourth quarter of 2016, with an impressive increase of 22.8%. Six other counties saw double-digit gains in sales. A lack of listings impacted King and Skagit Counties, where sales fell.
  • Housing inventory was down by 16.2% when compared to the fourth quarter of 2016, and down by 17.3% from last quarter. This isn’t terribly surprising since we typically see a slowdown as we enter the winter months. Pending home sales rose by 4.1% over the third quarter of 2017, suggesting that closings in the first quarter of 2018 should be robust.
  • The takeaway from this data is that listings remain at very low levels and, unfortunately, I don’t expect to see substantial increases in 2018. The region is likely to remain somewhat starved for inventory for the foreseeable future.

HOME PRICES

  • Because of low inventory in the fall of 2017, price growth was well above long-term averages across Western Washington. Year-over-year, average prices rose 12% to $466,726.
  • Economic vitality in the region is leading to a demand for housing that far exceeds supply. Given the relative lack of newly constructed homes—something that is unlikely to change any time soon—there will continue to be pressure on the resale market. This means home prices will rise at above-average rates in 2018.
  • Compared to the same period a year ago, price growth was most pronounced in Lewis County, where home prices were 18.8% higher than a year ago. Eleven additional counties experienced double-digit price growth as well.
  • Mortgage rates in the fourth quarter rose very modestly, but remained below the four percent barrier. Although I anticipate rates will rise in 2018, the pace will be modest. My current forecast predicts an average 30-year rate of 4.4% in 2018—still remarkably low when compared to historic averages.

DAYS ON MARKET

  • The average number of days it took to sell a home in the fourth quarter dropped by eight days, compared to the same quarter of 2016.
  • King County continues to be the tightest market in Western Washington, with homes taking an average of 21 days to sell. Every county in the region saw the length of time it took to sell a home either drop or remain static relative to the same period a year ago.
  •  Last quarter, it took an average of 50 days to sell a home. This is down from 58 days in the fourth quarter of 2016, but up by 7 days from the third quarter of 2017.
  • As mentioned earlier in this report, I expect inventory levels to rise modestly, which should lead to an increase in the average time it takes to sell a house. That said, with homes selling in less than two months on average, the market is nowhere near balanced.

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the fourth quarter of 2017, I have left the needle at the same point as third quarter. Price growth remains robust even as sales activity slowed. 2018 is setting itself up to be another very good year for housing.

Gardner, Matthew “Western Washington Real Estate Update” Windermere Real Estate, Windermere Real Estate 29 Jan. 2018 https://www.windermere.com/blogs/windermere/categories/western-washington-real-estate-market-update/posts/western-washington-real-estate-market-update–13

Posted on January 31, 2018 at 10:32 pm
Emerson DeOliveira | Category: Normandy Park, Real Estate News | Tagged , , ,

7 Small Home Flaws That Can Be Big Deals for Buyers

After living in the same home for a while, it’s amazing what you can get used to. A creaky floorboard, for instance. A chipped tile that you’ve been meaning to replace but haven’t gotten around to. A doorknob that needs a little coaxing to turn. No big deal, right?

Well, these small flaws can be huge deal breakers when you decide to sell your home.

“Prospective buyers are going to add all the ‘flaws’ they find to the price of the property, and that’s when they start trying to discount the price,” cautions Jane Peters, a real estate broker and owner of Home Jane Realty in Los Angeles.

Posted on January 17, 2018 at 6:01 pm
Emerson DeOliveira | Category: Normandy Park, Real Estate News | Tagged , , , , ,

10 hottest housing markets in America to watch in 2018

bellevue seattle washington homeSeattle’s real estate market is still going strong. Artazum/Shutterstock

The US housing market has regained its momentum.

About half of all homes in the country are worth as much or more than they were in April 2007, during America’s most recent housing boom, according to data from Zillow.

But some real estate markets are really on fire, with quickly rising home values and rental prices, increasing populations, low unemployment rates, steady income growth, and strong job opportunities, according to Zillow’s latest housing report.

Below, check out the top 10 hottest real estate markets in America for 2018, along with median home values and rent prices, median household income, and projected year-over-year growth.

 

10. Dallas, Texas

10. Dallas, Texas

Arina P Habich/Shutterstock

Median household income: $63,812

Median home value: $218,300

Median rent: $1,621

Real estate market growth forecast: 4.7%

9. Portland, Oregon

9. Portland, Oregon

Robert Crum/Shutterstock

Median household income: $68,676

Median home value: $370,700

Median rent: $1,902

Real estate market growth forecast: 3.7%

 

8. Nashville, Tennessee

8. Nashville, Tennessee

James R. Martin/Shutterstock

Median household income: $60,030

Median home value: $228,900

Median rent: $1,498

Real estate market growth forecast: 3.8%

 

7. Denver, Colorado

7. Denver, Colorado

EdgeOfReason/Shutterstock

Median household income: $71,926

Median home value: $376,500

Median rent: $2,056

Real estate market growth forecast: 3%

 

6. Austin, Texas

6. Austin, Texas

SoleilC/Shutterstock

Median household income: $71,000

Median home value: $277,600

Median rent: $1,713

Real estate market growth forecast: 3.3%

 

5. San Francisco, California

Median household income: $96,677

Median home value: $893,100

Median rent: $3,413

Real estate market growth forecast: 3.8%

 

4. Charlotte, North Carolina

4. Charlotte, North Carolina

Joseph Sohm/Shutterstock

Median household income: $59,979

Median home value: $181,600

Median rent: $1,300

Real estate market growth forecast: 4%

 

3. Seattle, Washington

3. Seattle, Washington

Artazum/Shutterstock

Median household income: $78,612

Median home value: $463,800

Median rent: $2,243

Real estate market growth forecast: 5.4%

 

2. Raleigh, North Carolina

2. Raleigh, North Carolina

AlexLinck/Shutterstock

Median household income: $71,685

Median home value: $233,900

Median rent: $1,441

Real estate market growth forecast: 3.7%

 

1. San Jose, California

1. San Jose, California

Sundry Photography/Shutterstock

Median household income: $110,040

Median home value: $1,128,300

Median rent: $3,514

Real estate market growth forecast: 8.9%

-Loudenback, Tanza “These are the 10 hottest housing markets in America to watch in 2018” Business Insider, Business Insider, 10 Jan. 2018 http://www.businessinsider.com/zillow-hottest-real-estate-markets-in-america-2018-1/#10-dallas-texas-1

Posted on January 10, 2018 at 9:12 pm
Emerson DeOliveira | Category: Normandy Park, Real Estate News | Tagged , ,

Avoid Overvaluing Your Home!

What are exact reasons an owner would overvalue their home and how important is it to arrive at a realistic market price?

The reasons an individual might overvalue his or her home are numerous, but I just wanted to touch on a few. The main, and probably most obvious reason for a high valuation of one’s home is because the owner has become emotionally attached to the property. Becoming emotionally invested in a home is completely understandable, perhaps it was a couple’s first home after they were married or possibly it’s the home parents have raised a family in. Whatever the reason is, it is important for the owner to know that these reasons don’t usually add any value to a prospective buyer. There is an old poker adage that says, “ never fall in love with your hand.” What this basically means is the more attached you are to a hand, the harder it will be to fold such hand, even when you know you should. The same rule applies for a house, as an owner it is paramount to look at facts when valuing your home rather than sentimental value. Regardless of which brokerage / agent you decide on, please keep that old poker adage in mind.

The second biggest reason owners will tend to overvalue is because they know the exact cost of every repair and upgrade they put into the home. History shows that it is often difficult to recover all of the money spent on costly renovations. While aforementioned remodels will help add value, owners will often think they can get back the total cost of the renovations plus some on top. Sadly, it is rarely the case that owners can recover the entire cost of a renovation. Keep in mind that the above statement pertains to owners who are planning to actually live in the home. These factors do not include professional “home flippers” who buy a run-down property for cheap, quickly drop in some remodels and place it back on the market. It’s important to note that these professionals are highly experienced at flipping homes, can do work in a very cost effective / efficient manner, and can turn properties around extremely fast. It is unrealistic for most homeowners to think they can do the same.

Arriving at a realistic market price is probably the single most important part of selling a home, slightly edging out how a property is marketed. As stated earlier it is important to only consider factors that are going to be relevant to prospective buyers, things like location, bedrooms, square footage and prices of local comparables are all important factors to take into account. When using the proper items correctly a homeowner will usually arrive at a correct market price and the home should sell. However, if an owner arrives at a high valuation based on factors that aren’t relevant to the buyer, the home may end up not selling at all. The failure to sell a home, especially in a hot market like West Seattle or Normandy Park, is an absolute tragedy. West Seattle and Normandy Park are markets where homes tend to move very quickly, unless they are hugely overpriced. In a previous post we did write that currently in the West Seattle and Normandy Park markets owners could look to price on the aggressive side, but please note that aggressive and overpriced are not the same thing. Overpriced homes (Prices significantly higher than market price) will tend to sit on the market a very long time and will usually sell for less than if the owner had sold it at a competitive price in the first place. The reason being that the best window to sell a home is up 0-14 days after a home hits the market, afterwards buyers and agents begin to overlook the residence. Additionally, any offer received will likely be lower due in part to buyers possessing more leverage because there will usually be more pressure on the seller to accept an offer.   Aggressively priced homes (Prices only slightly higher than market price) will still tend to move in hot markets, with all other factors being equal.

Those who decide to utilize an agent would be well served to find a very experienced and local agent who will give an owner an honest and accurate opinion for the fair market value of a home. Those who decide to go the for sale by owner route, which can usually prove to be extremely difficult but not impossible, be sure to consider tangible factors to give yourself the best shot to sell a home.

We hope this helps you owners out there looking to sell!

Posted on June 4, 2015 at 7:11 pm
Emerson DeOliveira | Category: Normandy Park | Tagged , ,