State of the Union

Here’s a quick look at some of the main drivers of the local market as we head toward the end of the year.

  • Interest rates remain near all-time lows. Rates on 30-year fixed rate mortgages are at around 4% and for shorter term loans, ARMs and even Jumbos the rates go down from there! These rates drive “affordability” and should keep buyers engaged.
  • The population of the Puget Sound region and more specifically the Seattle metro area continues to grow rapidly. The strong and diverse local economy is adding good jobs and people are drawn to the region’s communities, schools and lifestyle. We live in one of the fastest growing major metro areas in the country.
  • Residential rents continue to increase throughout the region, tilting the buy vs. rent calculation toward buying for many young and first-time buyers.
  • The builders are back in force and are out in the market competing to buy land for new construction projects. Cranes once again fill our skylines, and both new construction projects and remodels appear to be on every corner in residential neighborhoods from West Seattle to Kirkland.
  • The inventory of available homes for sale remains at or near its all-time low. In September the eastside averaged a 2-month supply of inventory and in Seattle the number was 1.4 months. A market is considered “balanced” between buyers and sellers if it maintains between 4 and 6 months of inventory, so we’ve got a long way to go.

So, add ’em up. Increasing demand from relocating employees, builders and foreign investors plus cheap money, rising rents and low inventory all point to a continued strong market and increasing home prices – at least in our area’s most desirable neighborhoods – well into next year.

As things slow down for the holidays, it’s a great time to take stock of your real estate situation and to evaluate possible action plans for the coming year. Let me know if you (or someone you know) would like more specific market data or if you just want to make sure you have all the possible options on the table for moving forward.