The Washington State economy added 79,600 new jobs over the past 12 months—an impressive growth rate of 2.4%, and well above the national growth rate of 1.2%. However, as we anticipated in last quarter’s report, we continue to see a modest slowdown in the growth rate as the state grows closer to full employment. Growth has been broad-based, with expansion in all major job sectors other than Aerospace (a function of a slowdown at Boeing). Given the current rate of expansion, I am raising my employment forecast and now predict that Washington will add 81,000 new jobs in 2017.
Given the robust job market, it is unsurprising that the state unemployment rate continues to fall. The current unemployment rate in Washington State is 4.6% and we are essentially at full employment. Additionally, all counties contained within this report reported either a drop or stability in their unemployment rate from a year ago. I maintain my belief that the Washington State economy will continue to outperform the U.S. as a whole. Given such a strong expansion, we should also expect solid income growth across Western Washington.
Home Sales Activity
- There were 25,312 home sales during the third quarter of 2017. This is an increase of 3.6% over the same period in 2016.
- Clallam County maintains its number one position for sales growth over the past 12 months. Only four other counties saw double-digit gains in sales. This demonstrates continuing issues with the low supply of listings. There were modest declines in sales activity in six counties.
- The market remains remarkably tight with listing inventory down by 14.2% when compared to the third quarter of 2016. But inventory is up a significant 32% compared to the second quarter of this year. Pending sales rose by 5.2% over the same quarter a year ago, which suggests that closings in Q4 will still be robust.
- The key takeaway from this data is that inventory is still very low, and the situation is unlikely to improve through the balance of the year.
- Given tight supply levels, it is unsurprising to see very solid price growth across the Western Washington counties. Year-over-year, average prices rose 12.3% to $474,184. This is 0.9% higher than seen in the second quarter of this year.
- With demand far exceeding supply, price growth in Western Washington continues to trend well above the longterm average. As I do not expect to see the new home market expand at any significant pace, there will be continued pressure on the resale market, which will cause home prices to continue to rise at above-average rates.
- When compared to the same period a year ago, price growth was most pronounced in Grays Harbor County where sale prices were 20.1% higher than the third quarter of 2016. Nine additional counties experienced double-digit price growth.
- Mortgage rates in the quarter continue to test the lows of 2017, and this is unlikely to change in the near-term. This will allow home prices to escalate further but I expect we will see rates start to rise fairly modestly in 2018, which could slow price growth.
Days on Market
- The average number of days it took to sell a home in the quarter dropped by eight days when compared to the same quarter of 2016.
- King County continues to be the tightest market, with homes taking an average of 17 days to sell. Every county except San Juan saw the days on market drop from the same period a year ago.
- This quarter, it took an average of 43 days to sell a home. This is down from the 51 days it took in the second quarter of 2016 and down by 8 days from the second quarter of this year.
- At some point, inventory will start to grow and this will lead to an increase in the average time it takes to sell a house. However, I do not expect that to happen at any time soon. So we remain in a seller’s market.
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 third quarter of 2017, I have left the needle at the same point as the second quarter. Though price growth remains robust, sales activity has slowed very slightly and listings jumped relative to the second quarter. That said, the market is very strong and buyers will continue to find significant competition for accurately priced and well-located homes.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
This article originally appeared on the Windermere.com blog.
While it is true that inventory remains tight, in many areas buyers are experiencing less competition for available homes. A well-crafted offer remains the key to their success. Pricing correctly is critical during this seasonal slowdown and sellers who heed this advice continue see strong interest and, in some cases, multiple offers.
The median price of a single-family home on the Eastside jumped 14 percent from the same time last year to a $855,000. As the median on the Eastside approaches the $1 million mark, the price tag for a luxury home is increasing. Of all the single-family homes that sold on the Eastside in September nearly 40 percent sold for more than $1 million. In the city of Bellevue, two-thirds of the homes sold for more than $1 million.
The median price of a single-family home sold in King County in September increased 16 percent from a year ago to $625,000. While down from the record high of $658,000 in July, it represents the highest value for any September since records began in 2000. Among the largest metro areas in the U.S., our region has now led the nation in price increases for the last 11 months.
Seattle’s inventory remains as tight as ever, with homes being snapped up in days. A big hiring push by local employers just keeps adding to the pressure. With supply dwindling and demand soaring, prices had only one place to go – up. In September, the median single-family home price in Seattle soared 15 percent over a year ago to $725,000.
The median price of a single-family home in Snohomish County sold in September was $450,000, a 14 percent increase over the same time last year. With just slightly over one month’s inventory of homes available, it’s unlikely price growth here will slow any time soon.
If you’ve been looking to buy a house, it’s easy to get discouraged. With our local real estate market still the hottest in the country, a lot of buyers have become frustrated after losing out to multiple offers and all-cash sales. While some buyers are considering waiting out the market, here is why that’s not a wise move.
1. Historically, this time of the year is the best time to buy a home.
The fourth quarter of the year has always seen the lowest demand for home sales. Kids are back in school. The holiday season is gearing up. It’s just not the time of year when people want to uproot their lives and move into a new home. That all changes in a few months. The market traditionally experiences the highest demand and the lowest inventory of the year between January and May. Your best bet is to make an offer now.
2. Home prices are expected to increase next year.
A booming economy, rising population, and an influx of highly-paid workers are all expected to sustain the strong demand for housing through 2018. While the sharp home price increases of the past few years are expected to moderate, Windermere Chief Economist Matthew Gardner predicts that home prices will increase by 9 percent next year.
3. Interest rates are predicted to rise.
Waiting means you’ll get less house for your money. It’s all about the One in Ten Rule. As Matthew Gardner explains, for every 1 percent increase in mortgage rates your buying power decreases by 10 percent. Even if home prices are flat a year from now (which is not expected), an increase in interest rates means you’ll have to borrow more money to buy the same house.
With home valuations at high levels today, buyers should consider three things before they purchase a home: Can I afford the monthly payments, do I like the location, and am I planning to live in the home for at least five years?
If you decide to move forward, your real estate agent can make the difference between winning the deal or not.
Here’s what sets me apart:
- I can position your offer to have the greatest appeal to the seller (and sometimes that’s not just a higher price).
- I have extensive experience creating the most competitive offer and successfully negotiating in multiple-offer situations.
- My peers value my professionalism and ability to “get the job done.”
- Your satisfaction is my top priority as evidenced by my repeat clientele and customer reviews.
Ready to start looking? I’m ready to help!
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Read the full PDF for more information.
High demand and low supply made it the market’s hottest August since records began in 2000. Sparse inventory was again the norm, as were multiple offers. However, brokers are cautioning sellers to price their homes correctly. Most buyers have been in the market a long time and are well educated. Overpriced listings are not getting showings or offers. In some rare good news for buyers in this heated market, mortgage lenders are relaxing some standards to make it easier to buy a home.
The median price of a single-family home on the Eastside increased 11 percent from a year ago to a $853,000. That number is down slightly for the second month in a row, but affordability is still a big issue. The share of million-dollar homes here is rising faster than just about anywhere in the country. In Medina, 99.7 percent of homes are worth at least $1 million. On Mercer Island, it’s 88 percent, and 64 percent of West Bellevue homes are worth $1 million or more.
The local area led the nation in home-price growth for the 10th straight month. In August, the median home price in King County jumped 18 percent over the same time last year to $650,000, off slightly from the record high of $658,000 in July. While inventory is low, the fourth quarter of the year has always seen the lowest demand for home sales. If you’re thinking about buying a home, it is to your advantage to work with your broker and make an offer now.
Inventory-starved Seattle just can’t keep up with the demand of its growing population. Lack of supply helped push the median price for a single-family home to $730,000, an increase of 17 percent over a year ago. That’s down slightly from the peak of $750,000 in June. If sellers need an incentive to put their home on the market, a recent analysis showed Seattle among the top U.S. cities for sellers to get the greatest return on investment.
While prices in King County may be showing the first signs of moderating, Snohomish County continues to hit new records for home prices. The median price of a single-family home here jumped 14 percent over the same time last year to $455,000, yet another record high.
Windermere’s Eastside Market Review is now available for the second quarter of 2017.
You can read the full report online by clicking the image below.
Instead of experiencing the typical summer seasonal slowdown, the real estate market in July was as hot as the weather. For yet another month, our area had the distinction of seeing home prices rise faster than any other market in the country. Buyers were hit with a double whammy – soaring prices and the continuing lack of inventory. Despite the rising prices, most homes are selling in about a week. Brokers are hoping to see the return to a more balanced market soon.
While down from its record in June, the median price of a single-family home on the Eastside soared 15 percent from a year ago to a $860,000. The median price in West Bellevue was $2.3 million, making it the most expensive area in King County. Even at that price point, competition is steep. Of the 71 homes that sold in West Bellevue in July, 40 percent sold in a week or less.
For the first time, the median home price in King County grew more than $100,000 in a year. That translated into a median home price of $658,000, a whopping 19 percent increase over the same time last year, and another new high. Tight inventory was a big contributor. There were 18 percent fewer homes for sale than last July.
With just two weeks of inventory, the supply of homes of homes for sale in Seattle just can’t keep up with demand from new residents to live close to the city. In the desirable, close-in Ballard neighborhood, there are currently only 17 single-family homes on the market. Prices are up accordingly. The median price for a single-family home in Seattle increased 15 percent over a year ago to $748,500, essentially unchanged from the peak in June.
While still a relative bargain when compared to King County, Snohomish County has been playing catch-up. Prices have regularly increased by double digits over the previous year. July was no exception. The median price of a single-family home jumped 12 percent over the same time last year to $453,000, another record high.
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.
The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.
Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.
I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.
Home Sales Activity
- There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
- Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
- The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
- The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.
- Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
- Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
- When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
- The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.
Days on Market
- The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
- King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
- Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
- Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.
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 second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement.
Inventory is short and buyers are plentiful.
Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year.
Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.
This article originally appeared on the Windermere.com blog.
It was another month of record-setting home prices in June as the area yet again took the prize for the hottest real estate market in the country. In a bright spot for buyers, the number of new listings added in June was the highest total for any single month since May 2008. While inventory is still low, the pace of sales is slowing and the number of multiple offers are down, suggesting that we may soon see a slight reprieve from the last year of rapid-fire growth.
The median price of a single-family home on the Eastside soared 19 percent from a year ago to a new record-high of $885,000. Despite that increase, multiple offers—while down—are still common. With most buyers presenting offers on multiple properties before purchasing a home, working with a broker to create a strong strategic plan, clear negotiating parameters, and a streamlined offer are critical for success.
The median price of a single-family home in King County climbed 14 percent over a year ago to a new record of $653,000. Inventory remains extremely tight, and homes are selling very quickly. According to a broker analysis, 80-to-90 percent of sellers in the Puget Sound area are accepting offers on their homes within 30 days of listing. In hot neighborhoods, that number can be just a few days.
Seattle home prices are rising at the fastest rate in nation. U.S. Census data shows Seattle is gaining about 1,100 residents week. With supply unable to keep up with soaring demand, prices just keep climbing. The median price for a single-family home in Seattle jumped 13 percent over a year ago to $750,000. The increase in the number of $1 million-plus homes in the city was among the highest in the country.
Buyers looking to get more home for their dollar continue to make the move north to Snohomish County. Demand is so high that new construction homes are selling before they’re built, with many new homes not even hitting the market. The median price of a single-family home sold in June increased 14 percent over the same time last year to $450,000, unchanged from last month’s record high.
Yes, it’s true.
We’ll need an additional 98,000 homes in the Seattle area by 2030 according to a new report from the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA). We have seen many comparisons of the yearly and monthly increases in dwelling spaces, but now we have a glimpse of how much growth will occur in the next 13 years.
The Daily Journal of Commerce notes this study relies “in part on research from Axiometrics, which has reported an annual construction of 5,884 units for the past five years.” Construction would have to increase a staggering 19 percent in order to keep up with the demand and our area’s growing population.
The report continues saying, “Future demand will be created by factors including an aging population, immigration and the decline in home purchases.” Seattle is now ranked 11th out of 50 metro areas in terms of the apartment demand by 2030. Currently, we have about 406,000 apartments, and that will have to increase 24 percent to meet the anticipated demand.
Read the full article on the Seattle Daily Journal of Commerce.