Washington State continues to see strong employment growth, outpacing national numbers with an annual rate of more than 3%. Interestingly enough, despite these substantial job gains, the unemployment rate remains stubbornly high at 5.8%. However, I’m not overly concerned about this because it’s largely due to a growing labor force rather than a declining job market. This means that those who are unemployed who had previously stopped looking for work are now resurrecting their job searches because they have confidence in the economy. I expect to see a modest drop in the unemployment rate through the balance of the year, and believe we will continue to outperform the nation as a whole with above-average job gains.
Home Sales Activity
- There were 22,721 home sales during the second quarter of 2016, up by 4.4% from the same period in 2015. We finally saw a much-needed increase in listings, which rose by 30.1% between first and second quarter. This increase in the number of homes for sale led to an increase in sales, which rose by 4.4% when compared to the same period in 2015.
- Island County saw sales grow at the fastest rate over the past 12 months, with sales up by 22.1%. This is a small county which is subject to wild swings, so I take the data at face value. That said, the larger Thurston County saw sales up by an equally impressive 19.7%. Most interesting is that King County saw sales fall modestly compared to the same time period in 2015. Price—and supply—are clearly an issue in the most populous county in our state.
- Overall listing activity was down by 21.8% compared to the second quarter of 2015, but the good news is that the supply side deficit is actually getting a little less than we have seen over the past few years. The total number of homes for sale was 30.1% higher than seen at the end of the first quarter. While much of this can be attributed to seasonality, it is still nice to see!
- The region is experiencing positive job growth, and with it, migration to Washington State is running at a very brisk pace. Given these factors—in addition to our lack of new home construction—it is not surprising to see demand substantially usurping supply. As I look forward, I believe inventory levels will continue to rise modestly, but it will remain a solidly seller's market for the rest of the year.
- With demand still exceeding supply, we should not be surprised to see average sale prices continuing to rise, as is certainly the case in our region. Home prices rose by 8.1% between the second quarter of 2015 and the second quarter of this year. This is down from the annual rate of 10.1% that we showed in our last report, but the rate is still far higher than the historic average of 4%.
- Regular readers of this report will remember that there were several counties where average sale prices in the first quarter were actually lower than seen a year before. I suggested that seasonality was to blame and that was indeed the case, with all counties in this report now showing annualized price gains.
- When compared to the second quarter of 2015, price growth was most pronounced in San Juan County and, in total, there were nine counties where annual price growth exceeded 10%.
- The prevailing supply/demand imbalance continues to push prices higher, and persistently low interest rates are just adding fuel to the flames. If rates stay at current levels, it is unlikely that we will see much in the way of slowing appreciation for the rest of the year.
Days on Market
- The average number of days it took to sell a home dropped by 17 days when compared to the second quarter of 2015.
- It took an average of 67 days to sell a home in the second quarter of this year—down from both the 86 days it took to sell a home in the first quarter of this year, and from the 84 days that it took to sell a home in the second quarter of 2015.
- The only market where the length of time it took to sell a home rose was in the notoriously fickle San Juan County, where it rose by 30 days to 196 days. In the rest of the region, the average decrease in the time it took to sell a home between the second quarter of 2015 and the second quarter of 2016 was 20 days.
- Snohomish County has joined King County as a market that takes less than a month to sell a home. At 18 days, King County is unarguably the hottest market in the region, but sales are slowing due to the lack of inventory. This imbalance is unsustainable over the long term.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economics factors. For the second quarter of 2016, I am leaving the needle in the same position as last quarter. Inventory levels have improved, albeit modestly, and price growth has slowed very slightly. However, this is offset by a jump in pending sales, a slightly higher number of closed sales, and a drop in interest rates. As such, the region remains staunchly a seller's market.
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 blog post originally appeared on the Windermere.com blog.
Despite an uptick in inventory, home prices hit new records in June yet again. A national study showed that home prices are rising faster in Washington than any other state. While lower interest rates provide some relief for buyers, sellers are the real winners. The increase in inventory indicates that more homeowners are starting to take advantage of this historic seller’s market.
EastsideAfter setting a new record last month, the Eastside saw home prices drop slightly from the May peak of $760,000 to $746,500 in June. That number was an increase of 11 percent over a year ago. Despite the small price adjustment, the Eastside continues to have the highest median home prices in King County.
King CountyThis is the fifth month in a row that the price for a single-family home in King County has set a new record. This latest peak was $573,552, up 15 percent from last June. Inventory increased slightly, but homes were snapped up quickly. One analysis shows fewer multiple offers, but indicated that 80 percent of new listings were selling within the first 30 days.
SeattleThe median price of a single-family home in Seattle was a record $666,500 in June, up 16 percent over the past year and a jump of 74 percent in the last five years. Those hoping to save money by renting aren’t seeing much relief. A recent report ranked Seattle with the second highest rent growth in the country.
Snohomish CountyDespite an increase in inventory, home prices in Snohomish County continued to rise. Buyers seeking an alternative to King County’s high prices are pushing their home search north resulting in increased completion for homes and adding to price escalation. The price here hit a new record of $395,000 in June, up 9.7 percent from a year ago.
The local housing market has so many elements that it can be difficult to identify a single cause of overcrowding, soaring housing prices, fluctuating mortgage rates, etc. However, for years Seattleites have relied on one constant scapegoat – Californians. According to The Seattle Times, Seattle residents may need to start looking at other factors, as a recent study found that the number of Bay Area residents searching for homes in the Seattle area has dropped 45 percent compared to a year ago.
The Seattle Times suggests that the fear surrounding the influx of wealthy, home-hunting Californians in Seattle may be exaggerated, but not unfounded. Census data shows that in a typical year about 3,650 people move from the Bay Area to King County. In 2015 the percentage of Bay Area home searchers looking at homes in Seattle skyrocketed to 5.1 percent. This year that share is down to 2.8 percent. That raises the question, what’s preventing people from even considering relocating to Seattle?
The article discusses some possibilities for why Seattle has fallen off Californians’ radars. People working in the tech industry have more options now that other desirable cities including Austin, Denver, Boston, and Washington, D.C. are turning into tech hubs. Although these cities also have various housing challenges, the article claims Seattle is the only one that has a “brutal trifecta” of problems: soaring prices, lack of inventory, and homes that sell too quickly for transplants to tour.
Looking at the future, if this decrease in home searches is any indication of things to come, homebuyers could soon experience some much-needed relief.
Find more information and read the full article at The Seattle Times.
As Americans are starting to feel more optimistic about purchasing homes, homebuilders are feeling hopeful about their sales. This is a welcome relief after a weak start to the spring home-selling season. During that time both parties were concerned about their prospects in the housing market. A recent article from The Seattle Times discusses the causes and importance of this positive change in sentiment among both groups.
How can we determine a rise in sentiment among home buyers and homebuilders? People have always understood the benefits of home ownership, so while the desire and demand have been constant, many factors deterred potential homeowners from investing in real estate. Lately we’ve seen that steady job gains and low mortgage rates are encouraging those people to buy new homes with less risk. That drives home construction and helps support the economy. This is where homebuilders come in (feeling optimistic).
Though new homes represent a small fraction of the housing market, they have an outsized impact on the economy. According to data from the National Association of Home Builders (NAHB), each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue. While we could just assume that new, steady jobs boost morale, the NAHB/Wells Fargo have an index that actually quantifies builder sentiment. Readings above 50 indicate more builders view sales conditions as good rather than poor. As of last Thursday, the reading was at 60, which is the highest it’s been since January.
Although the housing market has yet to recover from the consequences of the downturn a decade ago, rising sentiments prove that we are making progress. According to Robert Dietz, the NAHB’s chief economist, the latest builder survey results indicate that the housing market “should continue to move forward in the second half of 2016.” That makes us feel pretty optimistic, too.
Read the full article at The Seattle Times.
House hunters looking for relief from soaring rents continued to snap up homes at a record pace in May. By one analysis, 80 percent of the homes coming on the market in King and Snohomish counties sold within the first 30 days – many within the first week. With a severe lack of inventory in prime buying season, sellers are getting record prices for homes.
EastsideThe Eastside, already the most expensive area in King County, saw home prices set a new record in May. Median home prices on the Eastside were up by over $100,000 compared to last year, reaching an all-time high of $760,000. With just a month of inventory available, most new listings here drew multiple offers. Even with soaring prices, buyers should plan to act quickly and count on navigating multiple offers.
King CountyWith 20 percent fewer homes on the market here than last year, competition among buyers remained fierce. Tight supply and high demand sent prices surging. For the fourth straight month, King County set a new record, with the median price of a single family home sold in May jumping 16 percent over last year to $560,000. The market is in dire need of new homes to ease the inventory crunch.
SeattleSeattle has the 4th fastest growing population in the country. That growth has fueled demand. Seattle trails only Portland on the list of markets with the fastest-growing home prices. A single family home here cost $641,250 in May, an increase of 14 percent over the same time last year. While slightly higher than the median price last month, that figure is down from the peak in February.
Snohomish CountySince the close-in neighborhoods in Seattle and Bellevue have priced out most first-time buyers, they continued to look to Snohomish County as a more affordable option. The median price of a single-family home increased 11 percent over last year to $389,950. That price is slightly above the pre-recession peak in 2007. However, at 30 percent less than the median price in King County, it’s a relative bargain.
If you’ve been looking to buy a home in Seattle or the Eastside recently, you’ve probably been overwhelmed with news of bidding wars, rising costs, and inventory shortages. We’re here to share good news that will keep you optimistic about jumping into the housing market.
According to The Seattle Times, long-term U.S. mortgage rates fell this week after three straight weeks of increases. The average 30-year fixed-rate mortgage slipped to 3.6 percent from 3.66 percent last week, which is well below its level a year ago. As for short-term mortgages, the report states that it is unlikely that the Federal Reserve will increase short-term interest rates at its upcoming meetings this summer.
What does this mean for you?
It means now is a great time for you to invest in your new home. You know as well as we do that mortgage rates fluctuate often, so securing a home is all about seizing the day (and house) when conditions are right – like they are now.
What does this mean for us?
It means we are ready to work with you to help you find your new home, and soon. Contact us today so we can help put the power of Windermere to work for you.
Read the full article on The Seattle Times.
We're in a seller's market, no doubt. But we work hard to make sure that buyers see every benefit available to them.
Before we help you buy your home, Windermere Real Estate brokers help you find the perfect home for you. We go the extra mile and scour the listings to find the home that best fits your needs and lifestyle. In our 2015 survey of Windermere customers, 44 percent of buyers said their broker introduced them to the property while 37 percent found it themselves online. Windermere brokers do more than help you with the paperwork. They help you navigate the housing market with ease.
Windermere Real Estate brokers also hold the advantage in multiple offer situations when home sales often go over list price. With our expert knowledge and education, our brokers work hard to get you your new home and make your offer stand above the rest.
We will get the job done quickly. We're all too familiar with the cost of waiting to buy a home, so trust that your broker will help you get into your new home as quickly and stress-free as possible.
If you're ready to jump into our spring housing market, make sure you get in touch with us soon. We'll help you buy the home of your dreams!
This blog post originally appeared on WindermereEastside.com.
The supply of homes for sale in April was up over March, indicating that more sellers are deciding to list their homes. But with less than a month of inventory available in the area, it’s still a seller’s market. While prices were up over last year, the increases aren’t as lofty as they were in the first quarter of this year. Buyers looking for affordable housing continue to push their search outside the more expensive urban cores.
EastsideAt $730,000, the median price of a home on the Eastside was up 11 percent over last year. That figure was down slightly from February and March, suggesting that prices may be moderating. Competition for homes has not moderated. Brokers continue to report homes on the Eastside selling very quickly and often for over asking price.
King CountyAfter breaking records for home prices in February and March, King County reached a new record-high in April. The median price of a single-family home was $540,000, a 12 percent increase over the same time last year. The more affordable areas in the south and north ends of the county saw the greatest increases, with home prices climbing almost 20 percent in these outlying areas.
SeattleSeattle continues to have the tightest inventory of homes in King County. An influx of young, well-paid technology workers has fueled demand for homes close to the city. The median price of a single-family home increased 15 percent over a year ago to $637,250. But like the Eastside, that number was down slightly from February and March.
Snohomish CountySnohomish County posted more moderate price gains than King County. The price of a single-family home increased just 4 percent over last year to $375,000, down from a median of $385,000 last month. With prices here a third less than in King County, some buyers are willing to trade a longer commute for a more affordable home.
Last week, at the Windermere Builder Solutions Breakfast, more than 100 Windermere brokers came together to listen to Windermere President OB Jacobi lead a panel discussion on new home construction trends in the greater Seattle area. The panelists included Mike Owen, General Manager: Macadam Floor & Design; Belinda Leppa, Sr. Designer: Macadam Floor & Design; Curtis Gelotte, Sr. Principal: Gelotte Hommas Architecture; and Eric Drivdahl, Principal: Gelotte Hommas Architecture.
Macadam Floor and Design is a new builder design center located in Kirkland and they always give us the down low on the latest trends. So, what’s in?
- Bringing the outdoors inside. Do this with larger glass windows or folding glass doors.
- Minerals as hardware.
- Large geometric tiles on floors.
- Mixing metals, such as brass and gold.
Interior paint color – Grey still has a heavy influence, but it is warming up a bit and getting softened with a stone color. Of course, the Pantone colors of the year are playing a big part with light blues and soft pinks.
Wallpaper – Always a great place to get a little crazy. Textural, geometric patterns are so in.
Carpet – 2016 is about modernizing the traditional themes. People are doing geometric shapes and soft grays. However, hardwood floors continue to be on trend. It’s not uncommon for someone to do hardwood floors throughout the whole home, others are even putting wood on the walls. Fun fact: When the economy is good, floor color tends to lighten up, and when economy is bad, floors tend to darken.
Tile– Geometry, 3D textures, and extra extra extra-large tiles. Marble counter tops are still big and concrete is becoming more common in custom homes.
Cabinets – Many are painting them white with muted tones or contrasting wood tones. Mix and match. Get venturesome, but not reckless.
Lighting – Gold has come back in (don’t worry, not the gold of the 80’s). These are different from the pendants of last year; they’re brass and gold statement pieces. Remember: lighting is the jewelry of the home.
Plumbing – Plumbing is functional art. Brass, soft gold, and black (faucet) statement pieces are where it’s at.
We also learned that home owners are going bonkers for statement dining rooms. They love having a bold, fun place to entertain their guests. These are tying into a theme, which is: Nature luxe. Like we said earlier, it’s all about bringing the outside in. Yes, we’re seeing a lot of brave ideas and statement pieces going on, but it’s important to be subtle and do it in a tasteful way.
Gelotte Hommas Architecture kept the trend going with outdoor living. Seattleites think our climate is not the greatest for outdoor spaces, but according to Gelotte, with our mild winters and not-too-hot summers, we actually have the ideal climate for outdoor living… who knew! The most important thing to know about outdoor living is that it needs to flow from the inside to the outside. The space doesn’t need to be huge; a good rule of thumb is having your outdoor space roughly the size of your kitchen.
What’s being built? Modern, contemporary homes are still very much in demand. However, contextualizing a home into a neighborhood is really important so it doesn’t stand out too much. It’s about appropriate scale and size.
Multi-gen living is on the rise. Homes are being built to accommodate extended family which usually involves having an in-law suite. Also, bonus rooms are being made into living spaces.
When it comes to thinking green, most custom home clients are concerned with energy consumption, so they opt to get solar panels or geothermal heating.
That’s a wrap for the latest trends! How are you going to incorporate them in your home?
This article originally appeared on WindermereSeattle.com.
The supply of available homes remains at critical levels, with both King and Snohomish counties showing less than a month’s supply of inventory. With demand far outstripping supply, home prices increased by double-digits over last year throughout the Puget Sound area. The red hot market allows sellers to call the shots. Since some sellers are hesitant to put their home on the market for fear they won’t be able to find their next home quickly enough, many are negotiating with buyers to stay in their house for several months after the sale to ease the transition.