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.