The housing market has been the ongoing topic of conversation for many years here in the PNW. Where’s the top? What about this bubble? Is home ownership out of reach for me? If I sell, how will I get back into the market?
Fortunately, we have an opportunity to breathe a collective sigh of relief as values begin to stabilize and create a healthier, more neutral market.
We have entered what economists call a “Goldilocks” market… it’s just right, i.e., balanced between buyers and sellers. Well-recovered, post-recession valued homes are selling within 27 days when prepped and priced at fair market value, and interest rates hover just at 5%.
Are homes still expensive here? That really depends on who you speak to. For many Californians migrating north, homes are still very affordable in comparison. But for the rest of us… yes, prices are extremely limiting.
As our region continues to grow, suburban communities outside the Seattle metropolitan area are experiencing a surge fueled by the Millennial generation, now the largest generation in recorded history, because guess what? They are growing up! At 37 years old, the once ambivalent are committing to buying homes. With one foot in the city for work and the other just outside, counties north and south are experiencing greater annual appreciations than Seattle proper, breathing progression into suburban communities and building towards an inevitable urban sprawl.
The rules have changed when entering into the market. For Buyers, inventory has doubled, allowing for offers including standard elements and conditions. But do not get too comfortable – very desirable listings are still selling quickly and will require swift action and response.
Sellers will improve their experience and final sale results when coming to terms with the new median home price, which currently stands at $715,000 within Seattle, $620,000 for King County as a whole, $478,615 in Snohomish County, and $340,100 in Pierce County. With a 2-month supply of inventory, we are still experiencing a Sellers’ market. But gone are the days of the exorbitant over list price offers and inflated values.
So what about this feared “bubble”?
Home appreciations follow a fairly consistent 7-9 year pattern. Values peak, correct, and build gradually again. This is healthy and completely normal. What is important to note from the graph provided (post and prior fraudulent induced housing crash of 2008) is our region has a healthy record of inventory to sale ratio. Observe the 2018 spike in sales vs inventory. Further, into 2019 these ratios will meet and balance once again to correct as statistically projected.
Let us not lose sight of healthy economic patterns.
Seattle and the rest of the PNW experienced an unprecedented burst in home values based on historically rapid job and population growth that ultimately exhausted our supply relative to demand.
Homes are not stocks, they are shelter first and an investment second.
With 45 years of experience in the PNW appraisal industry, Alan Pope provides this graph and many more with area-specific data.
Visit his site at www.alanpope.com