When it comes to attracting new residents hoping to strike their fortune, Seattle still has “it.”
According to the Northwest Multiple Listing Service, n August, home values in King County, which is home to Seattle, made their highest leap since the real estate bubble burst in 2007.
Seattle’s median home value was $374,000, up 7.2 percent from August 2011. In King County at large, the median value was $316,800, up 3.4 percent from the previous year.
Many attribute the region’s real estate recovery to its natural beauty and growing tech industry. Seattle is expected to see jobs increase by 1.2 percent in 2013.
Statewide, Washington home prices grew 8.4 percent from January 2012 to January 2013, according to an article in the Puget Sound Business Journal (“Washington state ranks 14th in home price gains”).
Nationwide, home prices rose 9.7 percent in January 2013 over the same time the previous year. The figure includes distressed sales and marks the 11th consecutive increase in national home prices and the biggest increase since April 2006, according to CoreLogic, an Irvine, Calif.-based residential housing information provider.
“With these gains, the housing market is poised to enter the spring selling season on sound footing,” CoreLogic chief economist Mark Fleming said in a press release.
Meanwhile, the Urban Land Institute recently placed Seattle on its list of best overall real estate markets in 2013. Local real estate agents and brokers attribute the ranking to a variety of factors, including the following:
- A No. 2 ranking on Bloomberg Businessweek’s 50 Best Cities list. The publication wrote the following about Seattle: “For our runner-up best city, we turn back to the Northwest to the nation’s spiritual home for coffee and personal computing…high average median income, beautiful water-bound locale, and standout clean air.”
- Jobs. A recent study found that Seattle is the best place in the country for workers ages 18 to 29. Much of the reason for that could be owing to the city’s reputation for being hipster-friendly.In fact, Time Magazine recently named Seattle the top city for hipsters. On that note, traditionally hip neighborhoods such as Capitol Hill and Madison Park saw a 7.1 percent appreciation.
- The tech boom continues. The city’s more “tech-centric” areas, including South Lake Union, Queen Anne, and Magnolia, have appreciated by more than 5.5 percent since the start of 2012. Redmond, headquarters to Microsoft, appreciated by 9.5 percent during the same period of time.
The non-distressed median price for a King County single family home was $427,850 in February. That figure was up nearly 11 percent from the previous year, and up 7 percent from January.
As for the area’s distressed properties, the bank-owned median sale price in King County was at $195,000 in February, up 2.7 percent from the same time the previous year.
A total of 3,102 new and resale houses and condos closed escrow during January in the Seattle Tacoma-Bellevue metro area encompassing King, Snohomish and Pierce counties. January’s total sales fell 26.0 percent from the month before and increased 25.1 percent from a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.
A dip in sales between December and January is normal, with that decline averaging 25.6 percent since 1994, when DataQuick’s complete Seattle-area statistics begin.
The number of homes sold this January was the highest for that month since January 2007, when 4,223 homes sold. This January’s sales total was still 6.7 percent below the average number of homes sold during all months of January since 1994. Resale single-family house sales were 9.2 percent below the historical average for January, while condo resales were 28.4 percent above average and sales of newly built homes were 20.4 percent below average.
At the moment, Seattle is experiencing a housing inventory shortage, with 31 percent fewer homes for sale in March 2013 than in March 2012.
Most area real estate professionals say this is owing to the fact that the majority of homeowners would prefer not to sell their houses at the bottom of the market. However, typically Seattle sees more properties listed in the spring and summer.
The Northwest Multiple Listing Service predicts Washington state will experience a spring real estate market “to remember.” In a press release, the NWMLS quoted Dick Beeson, principal managing broker of RE/MAX Professionals in Tacoma, as saying, “The market is struggling to provide enough inventory for anxious buyers seeking to take advantage of low interest rates.”
The release went on: “Low supply and high demand continue to drive our market,” said Northwest MLS director John Deely. He said multiple offers are the “rule rather than the exception” for new listings in core urban areas that are priced well. Deely, the principal managing broker at Coldwell Banker Bain in Seattle, noted a new listing in North Seattle recently drew 12 offers and the property was bid almost 10 percent above its listing price.
O.B. Jacobi, a member of the MLS board of directors and president of Windermere Real Estate Company, said supply is at its lowest level since May 2005 during the peak of the housing boom. “The impact of low inventory levels is stiff competition among buyers, often resulting in homes selling for well over asking price,” he said.
J. Lennox Scott, chairman and CEO of John L. Scott, Inc., attributes surging sales and prices to several factors, including positive job growth, historically low interest rates and fewer homes being listed. “This restriction of homes for sale is prevalent in the price ranges where more than 90 percent of activity is taking place, causing prices to rise,” he said.
Still, those tracking the Washington state real estate market say prospective buyers should act now. Technology-powered real estate broker Redfin recently released an analysis showing homeowners why waiting to sell their current home to buy a nicer home could be a financial mistake.
“If you’re selling one house just to move up to another, it does you no good to wait for prices to rise — the price of the move-up home will increase faster than the price of the place you’re leaving behind,” said Redfin CEO Glenn Kelman. “But waiting until interest rates rise is what can really cost move-up buyers, because most economists believe that rates at some point will go back to historical norms, well above 5 percent. This means that most move-up buyers are likely to be trading in a low-interest loan on the old place for a higher-interest loan on the new one. In this scenario, the only winner is the lender.”
The Mortgage Bankers Association expects rates to rise to 4.4 during the next 12 months. Over a longer period, they are likely to be even higher, considering a 20-year average of about 6.5 percent.
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