Has the Seattle Housing Market Gone Nuts? Yes! But why?

April 4, 2014

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:

 employment2

employment1

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.

 confidence

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.  

kerstinweb

Kerstin G. Brooks
Brooks & Heinze Real Estate Team
Skyline Properties, Inc.
Cell: 206.276.5827
Web: http://www.propertyinseattle.com
Facebook: https://www.facebook.com/PropertyinSeattle


Competition is Fierce – Hot Seattle Housing Market

July 10, 2013

Multiple offers – Rising Property Prices – Rising Interest Rates – Low Inventory – Preinspections – Cash Offers, …. this is what my clients are dealing with everyday now. Yes the market is hot. It’s exciting and exhausting. The video below, recently aired on King 5, describes what buyers are going through well.

CLICK HERE FOR VIDEO

Working with an experienced agent who knows how to make your offer competitive is key in this market. To learn more about what sellers like to see in an offer, feel free to contact the Brooks & Heinze Real Estate Team.

Kerstin G. Brooks
Brooks & Heinze Real Estate Team
Skyline Properties, Inc.
www.propertyinseattle.com


Under water? Can’t afford your mortgage payments anymore? Short Sale as Foreclosure Avoidance Tool best for some Homeowners

February 28, 2010

According to yesterday’s issue of the Puget Sound Business Journal, about 16 percent of all residential properties with mortgages were in negative equity at the end of the year in Washington State.

Negative equity means the homeowner owes more on the home than the home is worth.  This  can occur because of a decline in real estate value and/or  an increase in mortgage debt.

In Washington state, there were 3,288 foreclosure filings  in November of 2009, with one in every 835 housing units receiving a foreclosure notice — a 15 percent increase from November 2008.

Today, the Seattle PI reported more bad news about the Labor Market.  According to the PI, it was the second straight week that claims rose unexpectedly.  High unemployment remains one of the biggest obstacles to a sustained economic recovery.

In short, the economy is still shaky and more and more homeowners are struggling to make their mortgage payments and feel stuck because they know they cannot sell their home at a price that will cover their mortgage.  Depressed, scared and uninformed about their options, many wait until the bank forecloses and evicts them from their home.

For some homeowners, a short sale may be the option they are looking for. A real estate agent may be able to sell their home in a short sale which means the bank allows them to sell their home at market value and forgives some of their mortgage debt to make the sale possible.

Each situation is different and there are no guarantees. If anyone says they can guarantee a successful short sale or charges you upfront, nonrefundable fees to negotiate a short sale for you — run!

Generally, a short sale is better for a homeowner than a foreclosure. The ramifications of a short sale on your credit history are much less severe than with a foreclosure. If you are looking to apply for an apartment and you have a foreclosure and bank eviction on your history, you may have a hard time finding a rental. Bad credit will also affect your insurance rates, employment opportunities, etc.

Your eligibility for a new home loan will be affected more gravely with a foreclosure on your record. Underwriting and qualifying guidelines for mortgages change all the time but with a short sale on your record you may qualify for a new loan in a couple of years, whereas a foreclosure may keep you from buying a new home for 6-7+ years.

If you are in the Greater Seattle Area and want to talk to an agent about selling your home as a Short Sale, please contact the Brooks & Heinze Team for a free, no-obligation consultation.

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
Ph: 206.276.5827
Email: info@propertyinseattle.com


Houses for Pennies on the Dollar? Really?

February 19, 2010

 Many buyers have heard that Seattle real estate is more affordable than ever. Yes, prices have dropped quite substantially but when I hear people saying or I read articles about “Houses for Pennies on the Dollar” I get a little perturbed.

 We have had a few people contact us with unrealistic expectations about what they can buy. We have had buyers asking us to find them large, updated homes with water views in nice neighborhoods like Greenlake, Richmond Beach, Queen Anne, etc. under $200,000. You’d be hard pressed to find a tiny tear down for that price in these neighborhoods. 

Don’t get me wrong, there are bargains to be had but one must be realistic. Foreclosures and Short Sales can be a good value but they often require work and patience.

Buyers want to look at bank foreclosures, but they don’t want to do any work if it needs repair. They expect all homes should sell at the bank foreclosure prices regardless of whether they need work or not.

The homes that need a lot of work are the ones that sell for bargain prices. So, if you want a steal be prepared to have to do some work.

Many buyers feel the foreclosures set the prices in the neighborhood even though they may be missing a bathroom, have a structural issue and need tens of thousands of dollars in updates. Buyers are quite often dissatisfied with the condition of the distressed properties, but they don’t want to look at a regular home that is all fixed up because it is not a perceived bargain (when they can be).

You could take two similar homes next door to each other, one being a foreclosure and needing $35,000 in repairs and another being a normal sale and in excellent condition. The bank foreclosure might be priced $35,000 below the normal home, but when the buyer sees it they’re turned off.  But then they’re also turned off by the price of the normal home because they feel it should be priced the same as the foreclosure fixer.

In short, there are bargains but be realistic. Either buy an updated home in good condition and get a fair price or get a fabulous bargain for a home that needs a lot of help and needs to be nursed back to health. Buying at a 20-30% discount compared to just a few years ago is a great deal and realistic. Homes for pennies to the dollar? Not in Seattle.

There are some great loan programs available for buying distressed and foreclosed homes that need repairs, such as the 203k FHA rehab loans & conventional construction loans.

For more information on these loan programs contact Michele Catoire at the Legacy Group in Bellevue, WA by email  at michelec@legacyg.com or by phone at (425) 818-5885.

 Michele Catoire

Happy bargain hunting!

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
Cell:  206.276.5827
Email: info@propertyinseattle.com

www.propertyinseattle.com


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