First Quarter Takeaway from Matthew Gardner: This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors. As you can see, we are still very clearly in the midst of a seller’s market, and unless we see a significant increase in listings, it will remain that way for the foreseeable future.
Price growth remains at healthy levels as inventory constraints persist. Interest rates are still at historic lows, and we expect that this will continue to be the case through 2015, which further favors conditions for home sellers. That said, obtaining a mortgage remains more difficult than it should be due to the ongoing implementation of the “qualified mortgage” rule which reduces access to financing to certain buyer segments.
To conclude, the region is in need of inventory and I hope that we will see a modest increase in listings as we move further into the late spring/early summer. Some are talking about the potential for another housing “bubble” given the lack of homes for sale and the bullishness of buyers in bidding up properties; however, I believe that there are sufficient safeguards in place so that we will not see this happen.
Read the full report on Windermere.com.
Fourth Quarter Takeaway from Matthew Gardner: Our market continues to add jobs and our population continues to rise (+63,000 in 2014), both of which are very positive. However, our housing market continues to have a lack of homes for sale.
Will we see an increase in listings in 2015? That is the million dollar question. If not, then we might see builders going into overdrive in an attempt to address pent up demand.
Interest rates are going to rise in 2014, but not at excessively fast rates. By the end of 2015, I still expect to see the average 30-year fixed rate below five percent, but a lot closer to it than we stand today.
I expect to see home prices continue to appreciate in 2015, but at somewhat slower rates that are more sustainable over the long term. However, it is possible that price growth may continue to escalate faster than anticipated, even if we see the number of homes for sale increasing, if a higher proportion of those homes coming to market are high-end homes.
*For a far more detailed analysis of the Western Washington housing market click on the pretty pic! It’s packed with all of the dirty details.
Local economist, Matthew Gardner, of Gardner Economics, stopped by our Premier Properties networking breakfast this morning to share his thoughts on the local economy and housing market. The long of the short of it is that the Seattle area economy is doing better than most. We have declining unemployment, positive job growth, and an expanding economy. Companies like Facebook and SpaceEx agree, which is why they’re not only opening up Seattle area offices, but making bold statements about their plans to grow. All of this is well and good, but as Mr. Gardner pointed out, it’s adding pressure to an already tight housing market where there isn’t nearly enough supply to meet the demand. So far this year, the lack of inventory is having a somewhat negative impact on sales, but not on prices; they continue to appreciate at a healthy pace. The one thing our market is missing? Move-up buyers. These are the folks that currently own a home, but want to “move up” into a new home. These buyers, for the most part, are staying put because there are so few homes to choose from. But by staying put, they’re not adding much-needed supply to a barren market. It’s a vicious cycle that Mr. Gardner thinks should start to rectify itself later this year, albeit, very slowly. Overall, we walked away with a sense that the state of our city is strong, and despite the shortage of homes on the market, we’re fairing quite well in our little moss covered corner of the country.