Housing Market Report – Expectations for the remainder of 2105

Posted: September 25th, 2015 by Brad

The big news for our local housing market this year; inventory shortages and rising prices. According to data from the Northwest Multiple Listing Service (MLS) King County’s median price for single family homes has increased 14.4 percent year over year, and the median price for condos has increased 19.7 percent year over year. Basic supply and demand economics are fueling upward trending home values.

King County currently has well below a two month supply of available homes for sale. Seattle has about a one month supply. Here’s how we analyze this data to determine current market conditions:
>6 Months Supply = Buyer’s Market
4-6 Months Supply = Balanced Market
<4 Months Supply = Seller’s Market

We anticipated seeing an increase in home supply as is common for our high sales season from early spring through late summer. That just didn’t happen this year. We often hear from people curious to know why we are experiencing a low supply of available homes. Several key factors are at work here:
1) Nearly unprecedented population growth not seen since the gold rush era.
2) Many homeowners have refinanced into cheap/low interest loans and are staying put.
3) Many homeowners still cannot sell their home for a profit.
4) Homeowners who would like to buy up or downsize are fearful of what they perceive to be a tough market to buy in, fearing they will not be able to find a home to live in before theirs sells and are sitting tight.

While our local housing market has had a slight increase in inventory and slight cool down in recent weeks, we anticipate real estate to remain robust well into next year. Along with that, we can expect to see either continued increases in home values or a gradual leveling off.

Mortgage interest rates, which the real estate industry has been anticipating to increase for a long time, are expected to be between four to five percent by year end. As home loans become less affordable, this could put a chill on home values. That is unless of course demand for housing continues to challenge supply.

Curious about current market conditions in your neighborhood or what you’re home is worth? Give us a call 866.766.7325.

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