We're ready to take on this new decade! Who's with us?
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We hope everyone's 2020 is off to a great start! We moved into our new WeWork office space downtown and are enjoying the space to be more creative and productive away from our four legged & furry office mates that don't understand personal space when we're trying to get work done!
If you're around the area and want to get a tour, talk shop or just grab a coffee, let us know. We'd love to catch up.
This month we wanted to share some insight from recent data, and offer our take on how the real estate market is setting up for 2020.
If you're new to our Newsletter, you can find past issues here. You can also sign up to receive alerts when we post to our blog on SettleInSeattle.com. |
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Will 2020 Spark the Seattle Housing Market to New Highs?
Home prices in the Seattle metro are basically flat over the last two years. Although median values have fluctuated seasonally, the current figures are roughly where they were in the beginning of 2018. As we begin a new decade, the Seattle housing market is showing signs of a potential upswing.
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Market Recap
Seattle has been labeled a “boom or bust” town since it’s incorporation. The past decade represents city's biggest boom since its beginning. Newcomers flocked to the area in record breaking numbers, driving home values up by almost $400k in six years, by far the largest margin of any US city.
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The median home values for Seattle and the East Side over the last decade reflect the drastic changes the region has experienced with the tech boom.
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The rapid price expansion came to an end in mid-2018 as affordability issues led to a resistance of further growth. Active inventory spiked 200-300% in size compared to figures during the six-year boom. For a brief time, it felt like a tipping point in values as mortgage rates were climbing and buyer demand was continuing to fade..
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The chart reflects the resistance level of around $915k met in June of 2018 that triggered a fall off to a support range of $775k-785k that was set in the late summer of 2017. The seasonal fall off at the end of 2019 held stronger than the same time period in 2018.
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Months of inventory is the measure of how many months it would take for the current supply of homes on the market to sell, given the current pace of home sales. You can see a correlation between the increase in supply and the decline in values. Part of this is driven by an increase in development new construction to meet demand. Additionally, buyers became wary of buying into the top of the market and / or they became fatigued with getting priced out of the market.
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The decline was brief as interest rates pulled back significantly last year, thus bringing buyers back into the market.
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Why We are Positive for 2020
The strength seen in the last couple of months positions sellers to be in control this spring. We are optimistic for growth in 2020 and expect to see new highs in the market, but likely a small gain comparatively to the last boom.
Here are a few reasons to support our case:
Tightening Supply
The number of properties for sale has been declining, especially in the lower end of the pricing spectrum. Areas to the south and north of the city played catch-up last year as buyers pushed further away for affordable homes. Inventory is likely to continue to be in narrow supply for the coming months drawing multiple offers for desirable properties.
Stable Interest Rates
Rates are expected to remain historically low throughout 2020. After three cuts from the Federal Reserve last year, it’s forecasted that the Fed will likely move to the sidelines this year. Plus, history shows that rates changes are rare in an election year.
The Local Labor Market
According to the U.S. Bureau of Labor Statistics, the unemployment rate for the Seattle-Bellevue metro area was down to 2.3% at the end of the year, 35% lower than the U.S. average. Employment is generally of high quality with the expanding opportunities in the Tech sector.
High Income Renters
Seattle has seen a surge in renters earning more than $150k/year. These figures are up over 800% in the last decade. Much of this demographic consists of singles in their 20's and 30's who may consider a home purchase as they grow their lives here.
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In Closing...
There are many contributing factors that influence the real estate market locally, regionally and nationally. If you want to learn more about the topics covered in this month's Newsletter, feel free to reach out.
As always, our goal is to partner with you on your real estate decisions, whether buying or selling. We want to stand out in a crowded field by offering friendly & professional service that you can trust. The highest compliment we can receive is when customers recommend us to their friends. We appreciate referrals!
We’ll continue to share more insights into this developing period in the coming months. Stay tuned and don’t forget to reach out and drop us a line- even just to say hello!
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Helpful Resources
If you are currently in a rental and are weighing the pros and cons of renter life vs. owner life, why not crunch the numbers with this Rent vs. Buy calculator from nerdwallet. It has numerous options to consider in your calculations.
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Vin & Candice Cangialosi, Real Estate Brokers
North Pacific Properties, LLC
2224 Queen Anne Ave N
Seattle, WA 98109
V: 206.939.3778 | C: 206.595.9645
vin.candice@settleinseattle.com
www.settleinseattle.com
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