The Gardner Report – Second Quarter 2017

Economic Overview

The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.

Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.

I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.

Home Sales Activity

  • There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
  • Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
  • The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
  • The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.

Home Prices

  • Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
  • Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
  • When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
  • The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.

Days on Market

  • The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
  • King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
  • Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
  • Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.

Conclusions

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement.

Inventory is short and buyers are plentiful.

Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year.

Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.

 

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 article originally appeared on the Windermere.com blog.

Posted on August 6, 2017 at 3:57 pm
Stephanie Kristen | Category: bellevue, economy, interest rates, market trends, real estate, statistics

Seattle /Eastside Market Report – June 2017

The hottest real estate market in the country just keeps getting hotter. Despite a large number of new listings, home prices in the Puget Sound area continued to set records in May. According to a Seattle Times article, “For the first time since the 2007 housing bubble, every county in the central Puget Sound region has set a new median home price record.” Brokers hope this news will help entice more sellers to put their homes on the market.

Eastside

Click image to view full report.

While down just slightly from its record high last month, the median price of a single-family home on the Eastside was up 15 percent from a year ago to $875,000. With just three weeks of inventory, those looking to buy a home can continue to count on a highly competitive market. It is key for buyers to work with a broker on a buying strategy, and to be willing to act quickly to make an offer.

Seattle

Click image to view full report.

Seattle is the fastest growing city in the country, and that demand is driving prices ever higher. That demand combined with razor-thin inventory has resulted in Seattle topping the nation in bidding wars. As a result, it’s no surprise that home prices here set yet another record in May. The median price for a single-family home in Seattle soared 14 percent over a year ago to $729,000.

King County

Click image to view full report.

King County is starved for inventory. The number of homes for sale in the county dropped 20 percent from a year ago. The good news: The number of new listings year-over-year grew for the first time in 2017. The bad news: They’re getting snapped up as soon as they come on the market. The median price of a single-family home in King County jumped 13 percent over a year ago to a new record of $632,000.

Snohomish County

Click image to view full report.

A steady stream of buyers being priced out of King County have set their sights north in hopes of finding a more affordable house payment. While home prices here are indeed less, that gap has been slowly closing. The median price of a single-family home jumped 15 percent over the same time last year to $450,000, an all-time record.

Posted on June 13, 2017 at 9:54 am
Stephanie Kristen | Category: economy, market trends, real estate, statistics

Seattle / Eastside Market Report – May 2017

The local real estate market—already the hottest in the country—set yet another price record in April. The number of homes for sale dropped 27 percent compared to a year ago, the lowest amount of inventory ever recorded for a spring month. The historically low supply of homes is making competition among buyers fierce. Sellers are in the enviable position of being able to structure sales agreements to include concessions such as rent-backs and longer closing time so they can take the time to find their next home.
Continue reading

Posted on May 9, 2017 at 10:34 pm
Stephanie Kristen | Category: bellevue, economy, interest rates, market trends, real estate, seattle, statistics

Seattle / Eastside Market Update – March 2017

Home prices are growing faster in our region than anywhere else in the country. After a brief slowdown last month, home prices in February jumped to new record highs. The reason? The lowest number of homes for sale on record. The surge in prices came well ahead of the normal seasonal spring uptick, adding even greater urgency among buyers competing for already severely limited inventory. It remains to be seen if the predicted hike in interest rates will help moderate the market. For now, sellers are calling the shots.
Continue reading

Posted on March 21, 2017 at 3:42 pm
Stephanie Kristen | Category: bellevue, economy, interest rates, real estate, seattle, statistics

Seattle/ Eastside Market Update – November 2016

Home sales outgained new listings again in October, further squeezing already tight inventory and pushing prices higher. Since new listings traditionally decrease in the fall, that inventory shortage is expected to last until spring. Sellers willing to put their home on the market now can expect plenty of interested buyers, and a highly favorable chance of getting the best possible price for their home.
Continue reading

Posted on November 28, 2016 at 4:14 pm
Stephanie Kristen | Category: economy, market trends, statistics

Seattle/ Eastside Market Update – September 2016

While homes prices were up by double-digits compared to a year ago, the market frenzy that has affected most of this year is showing some signs of moderating. With the exception of the Eastside, prices for most of the region were down from their peak. Home sales generally outpaced the same period a year ago, but a shortage of inventory continues to tip the advantage in favor of sellers.

Eastside

Click image to view full report.
Click image to view full report.

Bucking the trend of moderating prices, the Eastside saw the median home price soar 14 percent over last year to a new record high of $769,000. That eclipses the previous peak of $760,000 in May of this year. Very tight inventory in this highly desirable market was reflected in flat sales growth compared to a year ago.

Continue reading

Posted on September 28, 2016 at 12:47 pm
Stephanie Kristen | Category: bellevue, economy, market trends, real estate, seattle, statistics

Seattle/Eastside Market Update – August 2016

Home prices are still on the rise compared to a year ago, but there is some indication that prices are moderating. Combine that with an increase in inventory and we may be seeing some relief for buyers. Time will tell whether this is a momentary breather, or if we’re slowly moving to a more balanced market.

Eastside

 

Click image for full report.
Click image for full report.

Home to the highest concentration of luxury homes in the state, the Eastside continues to be the highest priced region of King County. Median home prices here were up 10 percent over last July to $750,400. That is down from the May peak of $760,000, and virtually unchanged from June. Buyers looking in this desirable market may be seeing the start of easing home prices.

 

King County

 

Click image for full report.
Click image for full report.

After five months in a row of record-setting prices, King County saw the median price of a single-family home drop slightly from the high of $570,500 in June to $555,000 in July. However, July’s median price was up 14 percent over a year ago. An increase in inventory, accompanied by a slight slowdown in sales, may indicate that the market is settling down from the frenzied pace we’ve experienced so far this year.

 

Seattle

 

Click image for full report.
Click image for full report.

Seattle also saw a small decrease in home prices, with the median price of a single-family home dropping from its record $666,500 in June to $650,000 in July. The July number still represents a hefty 13 percent increase year-over-year. Some buyers are looking to the areas of North King County that include Shoreline, Lake Forest Park and Kenmore for a more affordable alternative. Prices there soared 18 percent over last year, but the median price of $505,000 is significantly less than Seattle.

 

Snohomish County

 

Click image for full report.
Click image for full report.

The median home price in Snohomish County topped $400,000 for the first time, setting a record for the third straight month. Prices were up nearly 12 percent over the same time a year ago to $405,000. With prices here about 25 percent less than King County, buyers looking for lower housing costs continue to fuel an environment where multiple offers are common.

Posted on August 11, 2016 at 10:58 am
Stephanie Kristen | Category: economy, interest rates, market trends, statistics

Seattle/Eastside Market Update – June 2016

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.

Eastside

 

Click image to view full report.
Click image to view full report.

The 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 County

 

Click image to view full report.
Click image to view full report.

With 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.

 

Seattle

 

Click image to view full report.
Click image to view full report.

Seattle has the 4th fastest growing population in the country. That growth has fueled demand. Seattle trails only Portland on the list of markets with thefastest-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 County

 

Click image to view full report.
Click image to view full report.

Since 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.

Posted on June 30, 2016 at 10:27 pm
Stephanie Kristen | Category: bellevue, economy, market trends, seattle, statistics

Seattle / Eastside Market Update – May 2016

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.

Eastside

Click image to view full report.

Click image to view full report.

At $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 County

Click image to view full report.

Click image to view full report.

After 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.

Seattle

Click image to view full report.

Click image to view full report.

Seattle 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 County

Click image to view full report.

Click image to view full report.

Snohomish 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.

Posted on May 31, 2016 at 11:12 am
Stephanie Kristen | Category: economy, market trends, statistics

Housing Economics 101 – Q1 2016

Historically low inventory levels, how we got here, and what to expect in the coming year

The housing market is performing remarkably well, with the exception of incredibly low inventory levels in many areas throughout the country. Why is this happening? Windermere’s Chief Economist, Matthew Gardner, explains why and offers his predictions for what we can expect in the future. 

Posted on May 23, 2016 at 12:35 pm
Stephanie Kristen | Category: economy, interest rates, market trends, real estate, statistics