Monday, February 24, 2014

King County Home Sales Continue to Out-Pace New Listings as Critical Housing Shortage Worsens

We noticed an alarming trend in the Seattle real estate market over a year ago in October of 2012.  For 12 months in a row, home sales had exceeded new inventory coming on the market.

It then continued for 17 straight months until April 2013.  However the net gain of inventory for that month was only a measly 9 listings.  In our blog titled 
Housing Shortage on the Horizon in Seattle we predicted that if the trend of home sales continue to outpace new listing inventory coming on the market we would be headed for significant price increases.

That was 28 months ago.  And the trend continues:



From January 2012 through January 2014 there was a net inventory reduction of 3,040 homes. Last summer new inventory started coming on the market, but those homes were quickly snatched up by home buyers and did little to nothing to give the real estate market a healthy supply of homes to meet the current demand.




Available inventory is still at historic lows.  In the pre-bubble years of the early 2000's, available homes for sale each month varied between 6,000 - 8,000.  Today we only have about 3,000.

We have no reason to believe there will be any significant changes to this trend anytime soon.

While interest rates remain low and home buyer demand exceeds any new supply of homes, look for home prices to continue their rise.  Home prices were up 4% for 2012 and 12% for 2013.   We expect that 2014 prices will reach and/or exceed the 4% appreciation trend line as shown in the chart below.




So what does all this tell us?  It tells us that inventory is too low to meet demand which will continue to put upward pressure on home prices.  Home buyers will continue to be frustrated by lack of homes to choose from and getting involved in multiple offer situations.... memories of the Real Estate Bubble days.


Monday, January 13, 2014

Real Estate Market Update and 2014 Forecast For King and Snohomish County

2013 brought lots of good changes in our local real estate market.  Prices and  sales volumes have risen, and foreclosures have dropped dramatically.  Along with historic low interest rates, the local real estate market continues to heal from the pains of the implosion of the real estate bubble.  This is all great news as we move into 2014 and the real estate market continues to improve.

Current homeowners will see their home values continue to rise and recoup the losses over the last 5 years.

 

For the second year in a row,  prices are up in both counties.  Average home prices are up 10% in Snohomish County and 12% in King County.

As we predicted exactly a year ago, lack of inventory is influencing the market.  This caused a heated spring and summer market with rapidly rising home prices and multiple offer situations the caused plenty of frustration for homebuyers.

Until April of 2013, for 18 consecutive months prior, sales outpaced new listings. That brought fear that we just might complete run out of inventory altogether!  But that trend started to reverse itself by summer and inventory continues to slowly increase. 

This chart really shows just how much active inventory has been shrinking over the past few years.  We can also see in this chart the dramatic decline in distressed properties.  Short sales and foreclosure continue to decline which also helps the market to stabilize.




For 2014 we expect inventory to continue to increase slowly.  With interest rates still remaining at historic lows we expect the market to be brisk again during the spring and summer months.

2014 will be a good market.  While interest rates remain at historic lows, it will still be an excellent market for first time homebuyers.  For those looking to sell and move to a new home, it will be a great time to take advantage of improved home prices and low interest rates!

Friday, September 6, 2013

Snohomish County Home Prices Soar 16% in August - But Don't Get Too Excited!

Snohomish County posted one of the strongest rise in home prices this year in August - up a whopping 16% year over year.  Does this mean that prices are going to continue rising at this pace?  Are we going back to the "bubble" days when home prices were rising out of control?

The answer to these questions is: not likely.  When we look at the historical statistics over a long period of time, the trend is for sales volumes and home prices to drop off in the fall.  This happens most every year and is a typical cycle.

Typically the market peaks in price and sales volume in August and trends down through the fall and winter months just to pick up again in the spring.

Another market influence is increasing inventory.  Even though the increase has been minimal, it is a reversing trend that will influence supply and demand which is what has been influencing home prices.




Thursday, June 6, 2013

King County Average Home Prices Break Through $500,000 Mark

As we predicted in our October 2012 blog post "Critical Housing Shortage on Horizon in Seattle Could Cause Another Real Estate Bubble", it appears to be coming true.  We forecasted that we would see rapidly rising home prices due to lack of inventory, we have now seen prices rise over 15% for this year.  The average sales price for a home in King County for May was $501,146.


We are also seeing similar price increases in Snohomish County.  The average home price for Snohomish County is now at $326,795 which is a 16% increase over last year.

 
 
Until we see an increase in inventory or an increase in interest rates, prices will continue to rise.  
 

Tuesday, October 16, 2012

Critical Housing Shortage On the Horizon in Seattle Could Cause Another Real Estate Bubble.

There are interesting new dynamics setting up in the King and Snohomish County housing markets:  Pending sale have been out pacing new listings to come on the market for 12 months straight.


Currently buyers have been frustrated wilth the low amount of inventory to choose from in the market place.  Well priced homes in select areas are seeing multiple offers, many of which are turning into bidding wars in a return of the bubble days of 2006-2007.  Current active listings have now dropped below the 2006-2007 inventory levels.

This is not a healthy balanced housing market and could cause home prices to spike dramatically in the near future.  This could change if more inventory hits the market or mortgage interest rates rise significantly, neither of which are in the forecast.

But wait, aren't we expecting more foreclosures to come on the market?  Well, yes.  But not enough to put a dent in the low inventory numbers.  As a matter of fact, forelosure rates are at 3 year lows and there are no signs of any significant rise in the numbers any time soon.




What will the Seattle housing market look like in the Spring of 2013?  If you are a home buyer, it won't look pretty.  But if you are a home seller, it may be time to take advantage of regained property values and make that move you've been waiting to make for 5 years.



Friday, October 5, 2012

Snohomish County Home Prices Soar 15% In September 2012

As we move into the the fall real estate market we see the typical slow down in sales volume, but this is not keeping prices down by any means.  Snohomish County average home prices rose 15% year over year for September 2012.

We have seen home prices bump up and down throughout the year, but every bump up is higher than the previous.

Home prices are rising because buyers are now back in the market again and these factors contribute to rising prices:

  • Low Inventory (Supply & Demand)
  • Historical Low Interest Rates (Fear of missing out on low rates)
  • Pent up demand from prior years  (After waiting 5 years)
  • Fears of missing the bottom of the market (Timing)

Prices are expected to remain strong for the unforseeable future.  Unless we see a rise in inventory or interest rates don't expect any significant pull back in home prices.

Monday, August 6, 2012

Snohomish County Average Home Prices Up 8% For July 2012

Snohomish County average home prices rose 8% year over year for July 2012.  Year over year average home prices in Snohomish County have risen over the last four consecutive months reversing the trend of falling home prices over the last four years.  This is a good indication that we have reached the bottom of the market.  However, it is typical to see home prices dip slightly in late summer only to rally again during the next spring market.  It will be interesting to see if the year over year gains continue to hold up during the fall market.

Click on Graph to enlarge

Thursday, May 17, 2012

King County Foreclosure Rates at Lowest Level In 4 Years

The rate of foreclosed home in King County dropped to its lowest level in nearly four years.  In April we saw only 185 homes foreclosed on which was the lowest amount since June 2008.  This tells us that the market is continuing to heal and that the banks have moved through most of their seriously delinquent mortgages.   They also continue to improve their rate of loan modifications to keep families in their homes.


In Snohomish County we see similar declines, but our records only go back to 2009.  The month with the highest amount of foreclosures was January 2010, over 2 years ago.

We do not anticipate any significant increase in future foreclosures as bankers are also reporting fewer mortgage delinquencies.

Tuesday, April 10, 2012

Average Home Prices Up in King & Snohomish County

King County average home prices rose 6% in the month of March, while home prices rose 5.5% in Snohomish County.

The spring home buying season has arrived and reports are home buyers are having a difficult time finding decent inventory to pick from.



Wednesday, March 7, 2012

King and Snohomish County Foreclosure Rates Continue Dramatic Declines

The foreclosure rates for both King and Snohomish County continue to fall at a dramatic pace. Finally receding from record levels, we are seeing 3 year lows for February 2012, as banks continue to increase home retention through loan modifications and short sales.


The reduction in foreclosures is a postive sign of a healing real estate market. We are confident that the worst is behind us as home prices are also showing signs if stability. With continued low interest rates along with an increase in home sales we are definately on the road to recovery.