Dramatic Growth In Seattle-Area Luxury Homes Market

Luxury home available on Mercer Island

Luxury Mercer Island home available for $10,998,000

It’s no secret that Seattle’s housing market is one of the strongest in the nation, but what is a little surprising is the growth in the luxury homes sector. According to a recent story by the Puget Sound Business Journal, 537 homes sold for more than $1 million in just four Bellevue ZIP codes alone over the past year, 108 more than 2014 and an increase of 25 percent. 60 homes sold for over $3 million in those areas, up 43 percent over last year.

In Seattle as a whole, 901 homes have sold for $1 million or more so far in 2015, compared to 689 in 2014, according to statistics from the Northwest Multiple Listing Service. Of those sales, more than a quarter (241) occurred in the Central Seattle area comprising the neighborhoods south of the ship canal, north of I-90, and east of downtown. Most were clustered on North Capitol Hill and in the neighborhoods bordering Lake Washington, such as Madison Park, Washington Park, and Leschi. The most expensive sale of the year (so far) was a 9,820-square-foot estate on McGilvra Boulevard in Washington Park that fetched $5.75 million, followed by a lakefront Cape Cod-style home in Washington Park, which sold for $5.195 million. The PSBJ article states that sales of homes priced $1 million or higher in Ballard and Green Lake are up a whopping 200 percent.

The Seattle area’s growing job market is cited as one of the main drivers of the luxury home sales market, as is strong interest from international buyers, especially from China. With tech companies flocking to Seattle and Eastside job centers, they bring with them highly paid executives who may seek out luxury homes. The PSBJ article states that “Luxury homes are bellwethers of a thriving economy and growing job market. They are the ultimate proof of a prosperous and strong residential real estate sector.”

If you’re interested in Seattle’s luxury homes market, please contact one of our residential agents today.

Late Summer Gains For Seattle Area Housing Market

neighborhoodThe S&P/Case-Shiller Index numbers for August were released yesterday, and after a July where we saw average home prices decrease by 0.1 percent in the Seattle Metro Area (King, Pierce, and Snohomish counties), prices bounced back and increased by 0.7 percent in August. On a yearly basis, prices in the area grew by 7.6 percent, coming in at number five on the list of cities with the highest yearly gains among the top 20 metro areas in the index.

Though prices in the Seattle are are still four percent below their peak, overall prices are showing steady growth and much of it is coming from a surprising sector of the housing market: condos. Zillow’s Chief Economist Dr. Svenja Gudell said in a statement that in the national market “…a good portion of the overall home price growth we’re seeing, especially in cities, has been driven by strong growth in condominium values, which are currently appreciating more quickly than single-family homes.” He cited condos’ popularity with younger buyers, many of whom live more urban lifestyles, are looking for more affordable housing options than single-family homes. This appears to be true in the Seattle market, as according to statistics from the Northwest Multiple Listing Service, median condo prices in King County were up 19 percent this August over August 2014. The median price for a condo in Seattle was up 32 percent over the same time period to $248,500.

Overall, it appears that the U.S. market is leveling out. Zillow’s Gudell says that “Annual U.S. home value appreciation has stabilized and settled into a nice groove over the past few months, and this relative stability should continue into the foreseeable future.”

If you’re interested in speaking with a real estate expert about Seattle’s market, contact your local agent today.

Real Estate Site Ranks Seattle No. 1 Housing Market

1150 17th Ave E-33. straightened smalljpgReal estate website auction.com has ranked the Seattle area the No. 1 housing market in the country for single-family homes, according to its analysis of home prices, sales data, demand, and economic factors. They point out the combination of strong price growth, at 10.9 percent over the year, and an equally strong increase in sales over the year, at 12.6 percent, as indicators of our market’s overall strength. The Seattle area’s solid job market keeps attracting new residents, and relative affordability compared to other tech hubs such as San Francisco, San Jose, and New York has seen demand continue unabated. Coupled with the fact that it is still 13 percent less expensive to buy rather than rent in Seattle means that everyone is trying to get their piece of the Seattle real estate pie.

Rounding out the top five behind Seattle are three areas in Florida – Fort Lauderdale, Orlando, and Palm Beach County – followed by our little sister to the south, Portland, where prices grew by 9.4 percent over the year.

If you are interested in buying or selling a home in the Seattle area, contact your local real estate agent today!

Understanding the Basics of Appraisals

neighborhood

A home appraisal is a step of the mortgage process when an unbiased state-licensed professional determines a home’s value based on size, condition, function, and the quality of the home. To do this the appraiser must first inspect the property. Then, by researching similar homes within the area and comparing recent residential sales, the appraiser will present their “opinion of value” with all supporting data and research used to come to their conclusion.

The appraisal process is important because mortgage lenders require an appraisal before they’ll provide a home buyer a loan. This is because the value of the property will likely determine how much a lender will lend. Lenders want to make sure that homeowners aren’t over borrowing because the home serves as collateral for the mortgage. So, if the borrower were to default on the mortgage and go into foreclosure, the lender would be able to get back the money they lent by selling the house.

If you’re a buyer, a home appraisal also can function as protection for the client too. If an appraisal comes in higher than the price being paid for the residence, than the borrower will have more home equity than initially expected. Also, an appraisal can help protect a client in keeping them from overpaying for a home, if the appraisal comes in lower than the asking price.

If you’re a seller, you want your home to be appraised for the amount you’ve listed it for.  In order for that to happen there are a few things you can do to impact that number. Clean, updated, well-maintained houses tend to receive higher appraisals. Make sure things like the home’s exterior and curb appeal is one that is eye catching, holes in the drywall are patched, and rug stains are cleaned can help. It’s also a good idea to provide your appraiser with a list of recent list of improvement you’ve made to the home as well as a list of attractive aspects about your neighborhood. Be sure to mention items like grocery stores, parks, and neighboring schools.

If you are unhappy with the appraisal, sometimes there is an option to appeal called “Reconsiderations of Value.” So, if there were enhancements made your home or recent comparable residential sales that happened the neighborhood to which wasn’t considered in the initial appraisal, it’s important to provide this information to your lender. Also, getting a second appraisal is always available to the buyer as well. Lastly, it’s important to add that an appraisal that was conducted beyond six month prior will likely be considered out of date by a lender.

King County Home Prices Bounce Back in August

1After the median selling price for a single-family home in King County dropped to $485,000 in July, prices bounced back to just a hair under $500,000 in August, representing a 14.4 percent annual gain, and the biggest yearly gain of any month in 2015. Inventory in King County was also up slightly from July, and now stands at 1.36 months’ worth of supply, the most inventory we’ve seen since February, according to statistics from the Northwest Multiple Listing Service. In contrast, median prices within the sub-market of Seattle stayed essentially flat last month, having dropped by just $500 from $575,500 in July to $575,000 in August. However, that is a 15 percent increase over August 2014.

Inventory in Seattle followed King County’s lead and increased by a small increment to .91 month’s supply, up from .74 months’ worth in July. Lack of inventory continues to put pressure on the market in the Puget Sound region, with total listings down 29.7 percent in King County and down 32.7 percent in Seattle since this time last year. “The biggest challenges our buyers face are lack of inventory and the quality of homes to choose from,” MLS director George Moorhead said in a statement. Some believe this continued double-digit price growth combined with lack of available properties is not sustainable and that we may see a slowdown in the market as we enter the fall season, when inventory historically drops by about half.

The area condo market has made great strides over the year, especially in Seattle, where the median price rose from $299,000 in August 2014 to $395,000 this year – a staggering 32 percent. Prices increased more modestly countywide, but still showed strong growth with a 19 percent rise.

If you are interested in buying or selling a home in the Seattle area, contact your local real estate agent today!

Seattle Area Market: Prices Are Rising, People Are Buying

812 W GalerS&P/Case-Shiller released its Home Price Index for April today, and the numbers paint a familiar picture of the Seattle-area housing market: prices are rising, and people are buying. The average price for a single-family home in the area comprising King, Snohomish, and Pierce counties rose 0.9 percent in April from March, and was up 7.5 percent over the year. Despite the rise in prices, homes are selling in an average of 8 days in Seattle, and the number of completed sales in the three-county region was up a staggering 38 percent from last April. According to Zillow, the median single-family home in the area will now cost you $366,100.

Compared to the blistering pace of price gains at this time last year, when prices were up 11.2 percent on a yearly basis, gains seem to be moderating. In reference to the housing market as a whole, Zillow Chief Economist Stan Humphries said in a statement that “Normal home value growth is usually between 3 percent and 5 percent annually, well below growth rates of just a year ago, so the current pace is far more sustainable.” While the Seattle area’s growth has not fallen into that threshold yet, we’re not seeing the sustained growth of last year, when prices in the area grew by double digits on a yearly basis for 14 consecutive months. San Francisco and Denver are leading the nation in appreciation, with home prices having risen by 10 percent and 10.3 percent respectively.

It is still a great time to sell in the Seattle area, so if you are interested in listing your home, contact your local real estate agent today!

Seattle Homes Selling In Average of 8 Days

3804 E Blaine St.Across the U.S., houses are selling at breakneck speed, with homes only surviving on the market for an average of 28 days before being snatched up by eager buyers. Many homes sold even faster than that in May, with approximately 35 percent going into contract within two weeks of hitting the market. But you think that’s fast? The national market has nothing on Seattle, where last month homes sold after a mere 8 days on the market, and almost half sold above list price, according to Redfin. This no doubt is due to extremely low inventory, especially within the Seattle city limits, where there is less than a month’s supply of homes available, not nearly enough to satisfy the high demand for homes in the city.

Despite this increased buying activity, national home prices actually grew at a slower rate this May – up just 1.6 percent over April – compared to the 3 percent rise in prices we saw last May. On a yearly basis, prices across the country are up 6 percent from a year ago. List prices in the Seattle market increased just slightly from April to May (1.4 percent), and the median was $426,000. Year over year, Seattle prices were up 6.5 percent.

As these statistics illustrate, now is a great time to sell your home! If you’re on the fence, contact your local real estate agent to learn more about the selling process.

Young Owners’ Share Of Market Lowest Since 1900

1510 37th NewThere likely aren’t many facets of today’s housing market that can be compared to that of the Gold Rush era, but according to a recent article in The Seattle Times, young homeowners’ share of the market has regressed to early 20th Century rates. Among Millenials (25-34 year olds) in King County today, only a quarter own their own homes, on par with statistics for that age group in 1900. The percentage has dropped by 13 percent since the housing market peak in 2007, and it has fallen twice as fast as the national average, according to the Times.

By comparison, about 50 percent of homeowners in 1980 were from the 25-34-year-old age bracket, and 80 percent of young married couples making the median income or higher owned their own home. An increasing number of young people have been delaying marriage, and without the financial security of a two-income household, home ownership is out of reach for many young single people. Even in Seattle’s strong job market, singles and couples earning good incomes are increasingly held back by the area’s skyrocketing home prices, as well as student debt that is five times higher than it was 10 years ago.

But the article suggests that another factor could be simply that home ownership isn’t as attractive as it used to be, and young people just don’t want to buy. Many millenials had just graduated from college just as the economic crisis hit, shaking their confidence in real estate as a good investment. Even with the median rent for a one-bedroom apartment in Seattle hovering around $1,800 per month, it appears that a large portion the city’s population of young workers is choosing the low-maintenance flexibility of renting over the responsibilities of ownership. Apartment living as changed dramatically in recent years, and with the breadth of amenities ranging from community gardens to deluxe bicycle maintenance areas, yoga rooms, and rooftop fire pits, renting offers perks that owning a home can’t, with the added bonus of not being tied to a mortgage.

If you would like more information about renting or buying in the Seattle area, contact your local real estate agent today!

Seattle-Area Monthly Home Price Gains Second Highest In U.S.

Madison Park home for sale - $2,395,000

Madison Park home for sale – $2,395,000

Just when it seems like Seattle’s home prices couldn’t possibly go any higher, the S&P/Case-Shiller Index releases its monthly housing numbers. According to Tuesday’s release, Seattle-area home prices rose 2.3 percent in March, the second highest monthly gain of any city in the national index, trailing only San Francisco. That is up significantly from the 0.9 percent increase in February. The year-over-year change in March saw Seattle-area home prices gain 7.5 percent, which put us just outside the top five cities in terms of yearly gains. Yet again, San Francisco topped the list with a 10.3 percent increase, followed by Denver, Dallas, Miami, and Tampa. According to The Seattle Times, September 2008 was the last time Seattle’s index was at its current level (ominously, the same month Washington Mutual failed).

The question on everyone’s minds, especially in cities seeing double-digit gains, is whether we’re in the midst of another housing bubble, but S&P Dow Jones Indices Managing Director and Chairman David Blitzer does not believe that’s the case. Despite the steep gains in local markets, Blitzer says the national market is actually moderating. Whereas the national price index saw a yearly gain of a staggering 10 percent in February 2014, this month’s report showed a gain of less than half that, at 4.1 percent.  He says that even though that 4.1 percent gain is far higher than the average rise in inflation-adjusted home prices of 1 percent per year (since 1975), the fact that the rate of increase halved from 2014 to 2015 signals a return to moderate gains. He says “I would describe this as a rebound in home prices, not a bubble and not a reason to be fearful.” National housing prices are still 15 percent below their peak during the housing bubble.

The numbers for Seattle, however, come on the heels of a report from Redfin citing that the number of Silicon Valley residents searching for homes in Seattle has more than doubled over the past year. Likely pushed out by the Bay Area’s 10 percent jump in prices, transplants looking for homes in Seattle are adding even more pressure to the area’s extremely tight housing market, where the median home is selling in just 39 days in April, according to the National Association of Realtors.

If you are looking to buy or sell a home in the Seattle area, contact your local real estate agent today.

Prime Time To Buy, Yet Home Sales Lagging In U.S.

1113 N 26th St. TacomaDespite ideal conditions for home buying in much of the country – continually rising rents, low interest rates, and easing credit restrictions – home sales this April painted a disappointing picture of the spring buying season in the national housing market, according to a report from Zillow. While the number of completed home sales did increase by 4.7 percent on a yearly basis, that was a lower yearly percentage increase than the market saw in both January and February, which are generally considered to be the slow months for home sales.

Experts predicted that the sales market would get a boost from renters pushed into ownership by rent increases, but that hasn’t been the case, so far. While rents increased at a faster rate (4 percent) than home prices did (3 percent), and in general renters are spending a larger percentage of their incomes on housing than owners, there is still a strong demand for rental housing, especially among younger workers and among former owners who are still in the recovery stage after foreclosing during the housing crisis.

Additionally, in some markets such as Denver and San Francisco, both rents and housing prices have risen by double digits since last April, meaning renters may not be able to afford to buy, even if they wanted to. Despite Zillow economists’ prediction that housing prices will level out over the remainder of the year, high rents mean less money going into savings for a down payment, which may exclude many potential buyers from finally being able to make that purchase.

If you are interested in buying or selling your home in the Seattle area, contact your local real estate agent today!