Year In Review

Posted: December 10th, 2014 by Brad

Last January we made some predictions for this year, which we posted to our blog available via the following link: http://justrealseattle.com/2014/01/new-year-predictions/. The following five bolded statements were our 2014 market predictions with descriptions of what the market actually did this year.

1. Inventory Should Gradually Stabilize and Return to Traditional Seasonal Levels
Perhaps this was more wishful thinking for homebuyers, who have been engaged in a competitive market in some neighborhood areas since 2011. In King County, inventory has been trending low at about two months’ supply, which is still reflective of a market favoring sellers.

2. More Homeowners Are Likely to Return to Positive Equity
For 2014, it’s looking like home prices throughout the Northwest MLS’ 21 county area are up 6.6 percent on average. In King County prices are up by an average of 5.2 percent.

3. Mortgage Interest Rates Are Expected to Rise
While interest rates didn’t quite it the five percent mark as we had forecast, they certainly flirted with it before trending downward closer to three percent in recent weeks. The low rate trend cannot possibly continue with the economy picking up steam.

4. Foreclosure Activity Is Expected to Slow
In our own experience, we are seeing fewer and fewer bank-owned and short sale listings. Distressed sales by in large are now the exception whereas they were not too long ago quite common.

5. Further Declines in Home Affordability Are Expected
We certainly called this one. While home affordability may be shrinking as a result of upward pressure on prices and less favorable mortgage interest rates, it’s certainly being outpaced by the dramatic increase in rental rates. HSH.com recently posted a report declaring Seattleites need to earn $75k annually to afford the median priced home: http://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html#seattle

Just earlier in the year, HSH.com published a similar article with annual earning requirements for Seattleites far below today’s. You can link to this story on our blog: http://justrealseattle.com/2014/02/seattle-buyers-must-earn-63k/

We thought the year previous we would see some loosening lending guidelines. While 2013 was not the year for these, 2014 has shown some signs of lending becoming a bit less rigorous.

Next month we’ll make our 2015 real estate market predictions. Stay tuned …

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