The market sure has heated up. Prices are going up and multiple buyers are competing for the few houses available.
So what’s going on?
– Seattle Unemployment is Low:
In February the Seattle area’s unemployment rate hit its lowest level since September 2008 at 5.1%.
– Consumer Confidence is High:
Confidence is now at a new post-Financial Crisis high.
– Mortgage Rates are Still Attractive:
Current interest rates are roughly on par with where they were in August 2011 and still two points below the 6.41% average rate during the height of the housing bubble through 2006
– Limited Supply of Homes Available for Sale:
There is about a 1.8 month supply of homes for sale in King County. A 4-6 month supply is needed for a balanced market between home buyers and sellers. We are NOT in a balanced market – we have a strong seller’s market.
For much more detailed information, specific statistics and sources – see below:
Seattle-Area Unemployment at Late 2008 Levels
Let’s have a look at the jobs data for February and how the Seattle area’s unemployment rate and approximate labor participation rate alongside the national numbers.
In February the Seattle area’s unemployment rate hit its lowest level since September 2008 at 5.1%. The national unemployment rate is still a bit higher at 6.7%, also roughly on-par with late 2008 levels.
The Seattle-area labor participation inched up in February to 70.0%. The national labor force participation rate was steady at 63.0%.
For reference, in 2006 when everyone imagined the economy to be in great health, the local unemployment rate averaged 4.3% and the labor participation rate averaged 69.5%.
Here’s a look at the local and national unemployment rates:
Consumer Confidence at now post-Financial Crisis High
The Latest Conference Board Consumer Confidence Index based on data collected through March 14 is at 82.3 and was 4.0 above the February reading of 78.3. This measure of confidence is now at a new post-Financial Crisis high.
At 81.0, the Present Situation Index increased 0.7% between February and March, and is up 34% from a year earlier. The Present Situation Index is currently up 301% from its December 2009 low point, and sits at its highest level since April 2008. The Expectations Index rose even further in March, increasing 9.2% from February.
Mortgage rates still two point below average rate during the height of housing bubble through 2006
As of last week, the 30-year mortgage rate sits at 4.40%, down slightly from the high of 4.58% set back in August, but up more than a point from the low set in May of last year. Current interest rates are roughly on par with where they were in August 2011 and still two points below the 6.41% average rate during the height of the housing bubble through 2006 (source: Federal Reserve).
Limited Inventory fuels Price Hikes / Multiple Offers
According to the statistics on the NWMLS (Northwest Multiple Listing Service – all real estate agents are members of this service), there is about a 1.8 month supply in King County and a 2.2 months of supply in Snohomish County.
In general, four-to-six months is the supply needed for a balanced market between home buyers and sellers. We are NOT in a balanced market – we have a strong seller’s market.
There are just about as many pending sales as last year this time but it appears, the only thing holding back more sales is the lack of inventory. It is not unusual to see homes get multiple offers, sometimes as many as 40+ in nice neighborhoods and most popular price ranges.
Happy House Hunting! Contact us today if you are looking to buy a home or condo in the Greater Seattle Area.
Happy House Selling! Contact us today if you are looking to sell your home or condo in the Greater Seattle Area.