The Washington State economy has added almost 370,000 jobs since the lowest point of the recession at the start of 2010. Additionally, total employment is 176,000 jobs higher than seen at the 2008 peak. With a vast majority of our metropolitan areas having fully recovered from the job losses seen during the recession, I expect to see somewhat more modest job growth in the coming year. That being said, our economy will continue to expand, which will be a benefit to our region’s housing market.
Home Sales Activity
- There were 16,895 home sales during the fourth quarter of 2015, up by 4.6% from the same period in 2014. Sales activity is starting to slow somewhat but this is due to inventory constraints.
- The growth in sales was most pronounced in Cowlitz and Lewis Counties and double-digit growth was also seen in Thurston County. Sales declines were seen in Grays Harbor County and Skagit County, but only minimally.
- The number of home sales grew in all but two counties, with the average number of sales up by almost 6% from the same period in 2014.
- I am not surprised to see some decline in sales start to appear. Listing activity was down by 28% compared to the fourth quarter of 2014, and there were no counties where there were more homes for sale in Q4-2015 versus Q4-2014.
- Prices in the region rose by an average of 9.3% on a year-over-year basis but were 0.4% lower than seen in the third quarter of 2015.
- Unsurprisingly, no counties saw a drop in average home prices compared to fourth quarter last year.
- When compared to the fourth quarter of 2014, San Juan County again saw the fastest price growth with an increase of 37.6%. However, this county is notorious for extreme swings given the huge variations in prices in the San Juan Islands. Double-digit percentage gains were also seen in five other counties.
- As long as inventory constraints persist, it is likely that price growth will continue. That said, modest increases in interest rates, in combination with declining affordability conditions in several markets, will likely slow price appreciation.
Days on Market
- The average number of days it took to sell a home dropped by nine days when compared to the third quarter of 2014.
- It took an average of 78 days to sell a home in the fourth quarter of this year—down from the 91 days it took to sell a home in fourth quarter of last year.
- There were just two markets where the length of time it took to sell a home did rise, but the increases were minimal. Jefferson County saw an increase of eight days while Mason County rose by two days. King County remains the only market where it takes less than a month to sell a home.
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 fourth quarter of 2015, I have left the needle at the same position as the previous quarter. In as much as the market is still very heavily in favor of sellers, I fear that some markets are reaching price points that will test affordability. Furthermore, while inventory levels are likely to see some growth in 2016, it will not be enough to satisfy demand, adding further upward pressure to prices. Overall, 2015 was a stellar year with sales volumes and home prices moving higher across the board. In 2016, I believe we’ll see some growth in sales activity, as well as continued price growth – just at more modest levels than last year. Interest rates are going to rise moderately through the year, but still remain very competitive when compared to historic averages. In other words, any increase in interest rates should not be a major obstacle for home buyers. Looking forward, I believe 2016 will be a year of few surprises. Because it is an election year, I do not expect to see any significant governmental moves that would have a major impact on the U.S. economy or the housing 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.
The real estate market traditionally cools off in the summer, but August saw a continuation of the market’s hot streak. Home prices increased by double digits over a year ago, fueled by strong demand and the lowest inventory in more than a decade. Rising prices are kindling hopes that more sellers will be willing to put their home on the market.
Home values on the Eastside continue to be the highest in the region. The median price for homes sold in August was up 11 percent to $672,000. Very limited inventory translated into brisk sales as buyers snapped up homes at every price point. A $3.7 million home on Yarrow Point sold in just four days after being listed.
The median price for a single family home in King County was $499,950, a 14 percent increase over last August. Inventory has inched up, but the five weeks of existing supply is far below the three to six months of supply that is considered to be balanced. Condo sales were strong, with 22 percent more sales than a year ago.
Buyers frustrated with high home prices in King County have been drawn to Snohomish County in search of finding more home for their dollar. That demand has driven down inventory, which stands at just under two months of supply. Demand has also pushed prices higher. The median price of a single family home rose 11 percent over a year ago to $366,825.
Along with temperatures, the housing market sizzled in June. Continued low inventory coupled with ever-increasing demand pushed home prices in King County to an all-time high. The multiple offers and escalation clauses that have now become common make it a very hot market for sellers.
• Home prices in King County surpassed their 2007 peak.
• The number of closed sales in King County increased 17 percent over last June.
• Record low inventory continues to fuel competition among buyers.
While sales on the Eastside jumped 23 percent, inventory remains very tight. With very little new construction in the pipeline, low inventory is expected to continue until more sellers are willing to list their homes. An incentive is the continued price appreciation here. The median home price was up 6 percent to $670,000, the highest of any King County region.
There were almost 24 percent fewer homes for sale in June as compared to the same time last year. As a result, competition for homes is fierce, with first-time home buyers competing with foreign buyers and those moving here for new jobs. King County saw the median price of a home soar 10 percent over last June to $500,000 – an all-time high.
Continued strong demand has pushed home prices in King County over their 2007 peak. Faced with record low inventory and anxiety about rising interest rates, buyers are snapping up homes as soon as they come on the market. What is tough news for buyers is a boon for sellers. A recent analysis of home sales in King County showed that 41 percent sold for over list price. • Both closed sales and pending sales (agreements that have been signed but not yet closed) in King County were up by double digits over last March. • Home prices continued their steady rise. • April was the sixth consecutive month of record-low inventory.
EastsideBoth home sales and home prices on the Eastside rose in April. The number of closed sales were up by 15 percent over last year. The median price of a single family home was up 6 percent to $654,650. Stiff competition for homes was exacerbated by lack of inventory, with just one month supply available.
King CountyApril was the second month in a row that King County had less than one month of available inventory. (A supply of three to six months is considered balanced.) The number of closed sales climbed 17 percent over the same time last year. The median price of a single family home in King County rose 11 percent over last year to $480,000.
See the original article on the Windermere Eastside blog.