Last year’s real estate market was primarily driven by low rates, low inventory and an abundance of buyers. In 2014, home prices rose 6.1% in Seattle and 8.7% in Bellevue as sellers took advantage of multiple offers and quick sales.
The buyers who were fortunate enough to purchase, did so at an average 30 year fixed mortgage rate of 3.87% per Freddie Mac, very close to the historic lows.
With 2014 in the rear view mirror, we’d like to share with you what we expect in 2015.
· Housing prices to appreciate at a stable rate of 5-7%
· Rents will continue to rise, encouraging more millennials into buying
· Housing inventory is expected to increase giving buyers more options
· Interest rates to stay low for the first quarter but increase as the year goes on
Inventory is still very low. This holiday season, normally a slower time of the market, we were still involved in multiple offers, sales prices well over list and market times of a few days. We are in desperate need of new inventory. We expect to see more homes on the market as we head into spring. There is still plenty of buyer demand to absorb the additional supply to keep us in a strong and stable market.
Interest rates are low, but for how long? The average 30-year mortgage is still under 4%, which is extremely low on a historical basis. With the improving economy, it is only a matter of time before rates increase.
More options become available in lending. Credit remained tight throughout 2014, with underwriting standards being a challenge for many buyers. New Federal initiatives may make loans more affordable with the introduction of the 3% down conventional loan. This should give a boost to first time homebuyers who generally have the credit and income to purchase, but perhaps not the extra cash for a larger down payment and closing costs.
Everyone knows “location, location, location.” Lesser known but equally important could be “timing, timing, timing!” Whether you’re a homeowner going through a life change or a renter ready to take on the next step in your life, we would love to sit down with you and discuss the possibilities.
Thanks for allowing me to be your real estate resource. Here’s to your success in the year ahead!