Housing Market to “Spring Forward”
Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward”! Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market.
Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right.
Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.
That hasn’t happened this year.
Demand for housing has remained strong and is currently three times stronger than last year at this time.
The National Association of REALTORS (NAR) recently reported that the top 10 dates sellers listed their homes in 2014 all fell in April, May or June.
Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.
Bottom Line
If you are planning on selling your home in 2015, let’s set up a time to meet to evaluate the opportunities in your market.
February 2015 Market Charts from the Northwest Multiple Listing Service
Here are the latest market charts from the MLS.
Click on each image below for a larger version.
Active Listings vs. Sold Listings
Number of Pending Listings
Median Sales Price
For more information our the Seattle and Eastside Real Estate Market contact Tony Meier here:
[contact-form-7 id=”1448″ title=”Contact form 1″]
Early Spring Brings Bumper Crop of Homebuyers Who Face Inventory Drought!
KIRKLAND, Washington (March 5, 2015) – Favorable weather and restored confidence are propelling home buying activity around Western Washington to the highest level in nearly a decade, according to Northwest Multiple Listing Service sources.
“The pent-up demand being unleashed has rocketed pending sales back to the levels of our record year in 2006,” said Ken Anderson, president/designated broker at Coldwell Banker Evergreen Olympic Realty in Tumwater. Buyers have come off the sidelines, the former MLS director commented, adding “At the same time, homes for sale are near a 10-year low.”
Northwest MLS figures show pending sales system-wide surged 18.7 percent in February compared to the same month a year ago, rising from 7,247 mutually accepted offers to 8,599. Twenty of the 23 counties in the service area reported double-digit increases in pending sales.
Those numbers might be even higher given the ample supply of buyers, but inventory is far from ample.
“Listings are flying off the shelf faster than allergy medicine in this early spring market,” quipped MLS director Frank Wilson, the branch managing broker at John L. Scott, Inc. Poulsbo. He said the brisk activity is posing challenges for buyers. “They will probably make several offers before one is accepted and they just need to expect to be competing with others,” he cautioned.
Northwest MLS broker-members added more news listings to the database during February than 12 months ago (7,852 last month versus 7,234), but the higher sales volume kept inventory levels well below year-ago totals. The MLS reported 16,946 total active listings at month end. That compares to a total of 19,273 for the same month a year ago for a drop of about 12 percent.
John Deely, principal managing broker at Coldwell Banker Bain, also commented on the imbalanced market. “The early spring weather has brought a bumper crop of buyers to a market experiencing a drought of listings.” The MLS director said activity in Seattle continues to move “at the fastest pace in memory.” It is not uncommon for weekend open houses to draw upwards of 100 group visits and bidding competitions, he reported. “Multiple offers rule the day, with many bids at 20 percent over well-priced properties around Greater Seattle.”
For the 4,761 sales of single family homes and condominiums that closed during February, the median price was $280,000. That reflects a gain of about 6.5 percent from the year-ago sales price of $263,000. The volume of closed sales jumped about 13.5 percent from a year ago. Brokers reported 4,761 closed sales last month, which compares to 4,196 for the same month a year ago.
For single family homes, which accounted for 86 percent of all sales, the median price system-wide jumped about 7.4 percent, rising from $270,000 to $289,925.
A comparison of the four-county Puget Sound region shows single family homes in King County had the highest median price at $429,900 (up 6 percent from a year ago), followed by Snohomish County where February’s completed transactions commanded a median price of $330,00 for a year-over-year gain of nearly 4.8 percent. Kitsap’s median price was $238,903; in Pierce it was $233,000.
Condo prices increased 6.7 percent year-over-year, from $215,500 to $230,000. The total number of sales increased 6.7 percent.
“February was a very robust month,” observed Gary O’Leyar, a past chairman of the Northwest MLS board. “If there is any real estate market slowdown, we’re not seeing it,” he said, suggesting doubters look at King County’s Eastside corridor for new or newer high end homes in the $900,000-plus price range.
Northwest MLS figures show 68 homes sold for $900,000-plus in its Eastside segment during the first two months of 2015, outgaining the same period a year ago when brokers sold 36 such homes. “Be prepared to get in line to get into the new home pipeline,” O’Leyar advised.
The market for waterfront homes also appears to be gaining momentum.
“This is the year for waterfront homes in Kitsap,” reported Frank Wilson, noting they have been the last to recover price wise. “Values for waterfront homes were pretty flat in 2014 and they should start appreciating in 2015,” he said. “In the future, buyers will say ‘I wish I would have bought a waterfront home back when they were affordable.’ Today they are affordable.”
“Undeniably, our unusual spring-like weather has not only fueled and jump started an early allergy season, but the market as well,” suggested Diedre Haines, Coldwell Banker Bain’s principal managing broker for South Snohomish County. Characterizing the market as “exceedingly active,” she noted garden shops, home improvement stores, furniture stores and other retailers that sell home-related items are also experiencing high levels of activity.
Dick Beeson, the principal managing broker at RE/MAX Professionals in Tacoma and a member of the Northwest MLS board of directors, believes the market is adjusting to scarce inventory and the abundance in the buyer population in the form of multiple offers and frustrated buyers and sellers. “But buyers will not be dissuaded,” he believes, in part because they anticipate hikes in interest rates. “Sellers are frustrated because they can’t find replacement homes. Some won’t list their homes because of fear of not finding a suitable replacement,” Beeson believes. “This cycle will work its way out as spring brings more inventory, hopefully, and sellers give in and say they trust there will be a home for them somewhere,” Beeson stated.
Like Beeson, brokers around the Northwest MLS service area are clamoring for listings:
- “Hopefully, more potential sellers will seize this market window of opportunity as a good time to sell before the regional real estate market does finally start to level out and take a breath; which it will eventually.” — Gary O’Leyar, Berkshire Hathaway HomeService Signature Properties.
- “We desperately need inventory. Potential sellers of all shapes, sizes, price ranges and locations should be contacting their brokers and jumping off the proverbial fence.” — Diedre Haines, Coldwell Banker Bain.
- “Sellers haven’t experienced a market this favorable since those frothy days (of 10 years ago). With home prices now consistently on the rise, savvy sellers looking to trade up know this is the time to make that move.” — Ken Anderson, Coldwell Banker Evergreen Olympic Realty.
“The housing market is on fire,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Due to the backlog of buyers and shortage of homes available for sale, we are experiencing multiple offers on nearly every new listing. This is creating price appreciation where 90-plus percentage of the sales activity is taking place.”
Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 23,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.
Hurry Up!! Call your Agent and List your Eastside House!!
That headline might be a little aggressive. However, as the data on the 2015 housing market begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME!
We realize that existing home sales stumbled in January compared to December. But, if we compare the current September-January time period to the same period a year ago, we can see that existing home sales have outpaced last year every month with the January sales numbers 200,000 homes greater than last January:
Pending home sales (houses going into a contract) as reported by the National Association of Realtors has also done much better in the last five months compared to a year earlier:
And, buyer demand is continuing to skyrocket:
At the same time, the amount of housing inventory coming to the market compared to last year is plummeting:
Bottom Line
With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Give me a call today to see whether that is the case in your neighborhood.
New Construction = New Competition
For the last several years, home sellers had to compete with huge inventories of distressed properties (foreclosures and short sales). The great news is that the supply of these properties is falling like a rock in the vast majority of housing markets (only 11% of homes sold in January). Many homeowners are now thinking of selling as the impact of this substantially discounted competition has disappeared.
However, every seller of an existing residential property must realize that there is a new form of competition in the market: newly constructed homes.
According to the National Association of Realtors’ Profile of Home Buyers & Sellers new home sales accounted for 16% of all homes sold in 2014. The graph below shows the top 5 reasons that a buyer would choose new construction over an existing home.
The top three should not come by surprise. With a new home comes the ability to customize the design of the home and the ability to avoid having to renovate or deal with existing problems.
The 10% of respondents who cited “Lack of Inventory of Existing Homes” could very well increase in 2015. Existing home inventory for sale currently sits at a 4.7 months supply, well below the six-months needed to be at a historically normal market.
National Association of Home Builders (NAHB) reports that there is currently a 5.4 months supply inventory of new construction available for purchase.
Bottom Line
With a steady buyer demand currently in the market, if you are thinking of selling, perhaps you should do it now to avoid additional competition coming to the market.
Having the right Broker matters! Beautiful Home in Redmond SOLD just 5 days after list date for $62,000 over list price!
Note: The sellers interviewed two other Brokers (including a well known discount brokerage) and they were told to expect $500,000 to $550,000 at best for the home! Tony recommended a listing price of $575,000 and generated 9 offers on the home with a final sales price of $637,000! The end result was nearly $100,000 more in the seller’s bank account! |
After meeting with and carefully considering several real estate agents, we chose Tony Meier to help us sell our home. We couldn’t be more pleased with our choice. Tony’s expertise and professionalism are second to none.
He was very diligent to keep us fully informed throughout the whole process so that we could make sound choices at every step. Tony spared no effort on our behalf and was in constant communication with us. He is totally professional, knowledgeable, and diligent. We were able to sell our home quickly and for a price that we are very happy with thanks to Tony’s help.
We highly recommend Tony to anybody seeking to buy or sell a home.
David and Melissa Conlee – Sold in Redmond – 2015
Selling Your Eastside Home? The Importance of Using an Top Agent
When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.
In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past two years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.
However, the report also revealed that for the second year in a row 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.
Buyers search for a home online but then depend on an agent to find the actual home they will buy (53%) or negotiate the terms of the sale & price (31%) or understand the process (63%).
Stephen Phillips, the Chief Operating Officer for HSF Affiliates LLC, put it best:
“Home buyers are more informed than ever with their Internet searches and ongoing research; however, there’s a critical need to transform that information into analysis and advice that helps consumers make the best home-buying and selling decisions.”
The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.
Bottom Line
If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.
NAR’s Existing Home Sales Report
Where Are Mortgage Rates Headed?
The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to look at where rates are headed when deciding to buy now or wait until next year.
Below is a chart created using Freddie Mac’s February 2015 U.S. Economic & Housing Marketing Outlook. As you can see interest rates are projected to increase steadily over the course of 2015.
How Will This Impact Your Mortgage Payment?
Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.
Research released by Zillow touched on this point:
“As rates rise, new home buyers will confront higher financing costs and monthly mortgage payments. For many, this will mean tightening their budgets and sacrificing some luxuries they may take for granted today.”
The experts predict that home prices will appreciate by 4.4% over the course of 2015. If both predictions become reality, families would wind up paying considerably more for their home.
Bottom Line
Even a small increase in interest rate can impact your family’s wealth. To gain a better perspective, let’s schedule a meeting to evaluate your ability to purchase your dream home.