Is Seattle’s red-hot real estate market cooling down?

 

Unknown-3

For the first time in 10 years since the recession, the number of homes for sale in the Seattle area has increased considerably, reports The Seattle Times.

“There aren’t as many bidding wars right now,” said Beata Miklos, Managing Broker for Savvy Lane, a local online brokerage firm. “There isn’t as much urgency for buyers to place offers because they know that it’s softening up a little bit.”

Fierce competition for low-inventory of homes for sale has led to extreme bidding wars and lightning-fast sales. Now, the total number of single-family homes on the market in King County has jumped 43 percent in June from a year ago. And condo inventory has risen to an eye-opening 73 percent.

The Times reports homes already on the market are sitting unsold for longer periods of times, according to monthly data released Thursday by the Northwest Multiple Listing Service. Brokerages tell the NMLS since mid-spring, they’ve noticed fewer bidding wars and more homes selling for list price or below.

The total inventory of homes listed for sale has grown for three straight months on a year-over-year basis, reports the times, but the region still has a ways to go to make up for the past 10 years of declining numbers of homes for sale.

Robert Wasser of Prospera Real Estate said the price drop from May to June is the first price drop in King County since before the recession.

~Liza Javier, King5 News

Seattle homes sell for $123k over purchase price

d0514e0f-e700-44cc-88b2-26163a6493b1-large16x9_seattle_housing_sales

SEATTLE – A new survey has found that homes in the Seattle metro area sold for an average of $123,000 more than their original purchase price last year – a gain of 44.7 percent.

Nationally, people who sold their homes last year made $39,000 on the sale, or about 21 percent compared with what they originally paid. Only San Jose, Calif., and San Francisco notched higher price gains than the Seattle metro area.

The survey, by real estate firm Zillow, also found that the typical seller in the Seattle metro area owned the home for nearly 10 years before selling it in 2017.

In the Seattle area, dollar gains on home sales varied greatly from one neighborhood to the next.

Sellers earned the most in the Laurelhurst neighborhood of Seattle, earning $586,000 more than they paid for the home. At the percent gain level, sellers in the North Beach neighborhood of Seattle, gained the most, with a 112.4% gain on the sale of their home.

Elsewhere in the Seattle-Bellevue-Tacoma metro area, homeowners on Mercer Island made the greatest dollar gain – selling their homes for a median of $470,00 more than they paid for the home. At the percent level, sellers in Bellevue reaped the most, with a 73 percent gain.

A short supply of homes for sale has kept upward pressure on home prices, especially in markets where available homes are hardest to find. The profits are welcome news for home sellers who are able to cash in on higher home prices, but demonstrate how difficult the market is for buyers.
In addition, it is increasingly common for homes to sell for more than the listed price – in 2017, nearly a quarter of all homes sold for more than the asking price, up from 18 percent in 2012.

Some other key findings of the Zillow survey:
– The Houghton area posted the biggest dollar gain of any Kirkland neighborhood, with an average gain of $505,500.
– In Bellevue, the Somerset area saw the largest price gain of $560,000, with Cougar Mountain coming in second highest, at $473,000.
– The North Redmond area notched the biggest dollar gain in Redmond, with an average increase of $371,005.
– Seattle neighborhoods that experienced an average gain of $400,000 or more include Laurelhurst, North Beach, Madrona and Montlake.
– The View Ridge-Madison area posted the biggest gain of $116,000 in the city of Everett.
– The Madrona area of Federal Way notched the biggest gain there, with an increase of $99,500.
– The northeast area of Tacoma posted a gain of $104,719.

~KOMO News

Seattle-Tacoma-Bellevue area has nation’s 4th strongest economy

4fd41ff6-f655-4427-b6bb-73c7b944bcd4-large16x9_PKGSEAHEADTAXPROPOSAL.transfer_frame_1853

A new survey ranks the Seattle-Tacoma-Bellevue area as having the fourth-strongest economy in the nation.
The new report, by Business Insider, ranked the strength of the nation’s 40 largest metropolitan areas based on five criteria: unemployment rate, average weekly wage, job growth rate, gross domestic product per capita, and GDP growth rate.

The survey then placed those criteria on a common scale and combined them to get a picture of the overall state of each metro area’s economy.

The study found that some metropolitan areas, such as Seattle, have particularly strong economies. Others, such as Cleveland, Virginia Beach and Providence, are much weaker.

According to the report, Seattle’s economy has been supercharged by hosting the headquarters of Amazon, even though the online giant has a mixed relationship with the locals of its home city.
Seattle’s 2016 GDP per capita of $86,889 was the fourth-highest among the 40 largest metro areas, and its third-quarter 2017 average weekly wage of $1,445 was the third-highest in the nation.

The Portland-Vancouver area was ranked 13th, with an above-average GDP growth rate of 3 percent.

The five metro areas with the strongest economies, in addition to Seattle, were (No. 1) San Jose, Calif.; (2) San Francisco, Calif.; (3) Austin, Texas; and (5) Denver, Colo.

~KOMO News

King County housing inventory increases, but buyer fatigue remains

Unknown-3A surprise surge in home inventory means some good news for house hunters in King County.

The May numbers, supplied by the Northwest Multiple Listing Service this month, show an increase that’s late in the home selling season.

“Big jump. 36 percent jump year over year in active inventory and so it’s almost 1,000 new units came online in King County,” said Matthew Gardner, Windermere Real Estate Chief Economist. “One jump in a month is a good thing. I want to see it continue.”

It’s better news for buyers who’ve seen 44 months of negative inventory numbers. May snapped that streak.

“For the buyers, more inventory is good,” said Rebecca Carlson, a Coldwell Banker Bain broker.
Carlson noted as inventory was going up last month, she said many buyers took a break.

“They’re feeling frustrated by multiple offers, having to waive everything, and not feeling like you have much control as a buyer,” said Carlson. “Depending on the area and the neighborhood, we’re just seeing fewer buyers looking.”

In King County, there were 1.12 months of inventory left on the market. That’s how long it would take to sell every home if no more homes were put up for sale. A balanced market is 3-6 months.

~Ryan Takeo, King5 News

5 tips for making an offer in a hot real estate market

987096__480-244x300

Steady demand. Limited supply. That’s what we are seeing in real estate markets across the country right now. Inventory is particularly tight within the lower price ranges. “The starter house is nearly missing in some markets,” according to Jessica Lautz, managing director of survey research and communication for the National Association of Realtors.

Of course, conditions can vary from one city to the next. But the overall trend in housing markets across the country is that supply is still falling short of demand. Given these conditions, it’s important for home buyers to make a strong, smart offer when the right house comes along. Here are five tips for doing exactly that.

1. Understand the supply and demand situation in your area.

According to housing experts, a so-called “balanced” real estate market has five to six months of supply. This means, in theory, that it would take five or six months to sell off all homes currently listed for sale, if no new properties came onto the market.

Many real estate markets across the country have less than a three-month supply right now. And some cities have less than a two-month supply.

The first step to making a strong offer is to understand the supply-and-demand situation in your area. We are still seeing sellers’ market conditions in many cities, as of spring 2018. And this could persist for some time.

2. Study recent sales prices in your area.

This is something a real estate agent can help you with, but you can do some of it for yourself. The idea here is to get a good understanding of recent sales prices in the area where you want to buy.

This will help you in a couple of ways. It will save you time during the house-hunting process, by eliminating the need for repetitive research and pricing “sanity checks.” It will also help you make a strong, realistic offer backed by recent sales trends. And speaking of offers…

3. Make a strong and timely offer, backed by comparable sales.

In a slow housing market, where sellers are ready to jump on the first offer that comes along, home buyers have the luxury of taking their time. A buyer might start off with an initial offer below the asking price, just to open negotiations. The seller would probably come back with a counteroffer, or accept the first offer.

But it doesn’t work that way in a more competitive real estate market with limited inventory. In a tight market, buyers are better off making their first offer as competitive as possible. Otherwise, the house could go to a competing buyer.

4. Consider writing a love letter to the seller.

A house love letter, that is! Recent studies have shown that buyers in competitive real estate markets can improve their chance for success by writing a heartfelt letter to the seller. Sure, real estate is a business transaction. But there’s a personal side to it as well. Writing a personal letter to tell the sellers what you love about their home might just tip the scales in your favor.

5. Get an agent on your side.

It’s always a good idea to have help from a local real estate agent. It’s even more important in a tight market with limited inventory. An agent can help you move quickly, putting together a strong offer that’s supported by recent sales data.

~Content provided by MetroDepth

It’s really tough to be a homebuyer in Seattle

seattle

If you’re hoping to buy a home in Seattle, be prepared for rejection. A lot of it.

“For buyers, we are typically making six to 10 offers before we get a house,” said Rob McGarty, who has been a real estate agent in Seattle for 14 years. “The amount of emotional energy going into preparing these offers is huge.”

Home prices in Seattle are on fire: rising nearly 13% in February from the same time a year ago, according to the latest S&P CoreLogic Case-Shiller Indices.
Prices have risen so fast that it’s led to an affordability crisis, with no relief in site.
“Seattle seems to be defying all the laws of housing market trends,” said Daren Blomquist, senior vice president at real estate data firm ATTOM.

The problem is simple: there are more people looking to buy homes than there are homes available for sale.
Seattle’s population has been rapidly growing recently thanks in part to its large homegrown businesses like Amazon and Starbucks.

Amazon in particular has played a major role in Seattle’s economic growth and strength. The company employs more than 40,000 workers at its Seattle headquarters and pays out nearly $26 billion in compensation.
“Amazon has amassed a huge talent pool of employees that has caused other companies to open offices here,” said McGarty. “We have a ton of [San Francisco] Bay area companies that now have offices in Seattle … those transplants have driven prices up.”

Home values in King County, where Amazon is located, have appreciated twice as fast as the national average, according to Blomquist. Average annual home price appreciation from 1995 (when Amazon first launched) to 2018 was 6%, according to ATTOM. Over the same time period, the national average was just 3%.

Life as a buyer

After months of online searching, open houses and having several offers rejected, Kayela Robertson and her husband, Cody, had hit their limit. She said it was common to see the homes they lost out on go on to sell for at least $100,000 over the asking price with multiple offers. They were about to expand their search radius when they made their seventh offer.

“If we were going to be in Seattle, we had joked that we needed to get this house. This was the make it or break it offer,” she said. “If we didn’t, I would have to cave and move farther out.”
Fortunately, their seventh offer was accepted. To close the deal, they offered $140,000 more than the list price of $590,000. They also dropped all contingencies, included an escalation clause, put $100,000 in escrow and promised to close within two weeks.

The couple sold their home in Spokane in January for full asking price, and the money from the sale helped make their offer competitive. They closed on the new home a month ago.
“The house we sold was much nicer and bigger and was much less [than the Seattle home],” Robertson said. “It is still an adjustment that we are paying more than two times more for this house.”

After months of online searching, open houses and having several offers rejected, Kayela Robertson and her husband, Cody, finally snagged a home in Seattle.
Where Seattle goes from here

Despite being a seller’s market, Seattle homeowners are hesitant to sell. Last year, the city was among the best markets to sell a home, and the average home seller return on investment was 64%, according to ATTOM. But even if they get a good price, sellers are struggling to find a home to trade up to.

While the demand is clearly there, there’s only so much room to build in Seattle. It’s bounded by water and mountains. The city also has strict regulations when it comes to building apartment and condos, and 70% of the land mass in the city is zoned for single family homes, according to Matthew Gardner, chief economist at Windermere Real Estate.

“We aren’t very dense at all,” he said.

The home affordability problem could make the city less appealing to businesses. The city recently passed a new tax on big businesses that will help pay for affordable housing and fight homelessness.
At some point, the housing affordability issues and high cost of living, plus the new business tax, could cause companies to think twice about starting or expanding in Seattle.


“The two most important things when companies think about growing in a market is whether there is a suitable talent pool and how much they have to pay people, and the biggest part of salary is the local cost of living,” said Gardner.

~Kathryn Vasel, CNN Money

How Much it Costs to Buy a House in the Hottest Housing Markets of 2018

seattle

Most areas of the country are in a seller’s market, meaning there’s not enough inventory for all the interested homebuyers. About half of all the homes in the country are worth as much or more than they were in April 2007 — the height of America’s housing boom.

This is all good news if you’re planning to sell your home. It’s less good news if you’re trying to find one. But as with most things when it comes to buying a house, like what kind of hidden fees you can expect during the process, where you live matters. Certain areas of the country are exploding in popularity, which is driving up the cost of homes.

Ahead, check out how much it costs to buy a home in the hottest real estate markets of 2018 according to Zillow’s latest housing report.  Hottest Housing Markets

Who’s moving where and for what jobs? Glassdoor study reveals top U.S. cities applicants are eyeing

Screen-Shot-2018-05-17-at-2.58.18-PM-630x383

Seattle is a leading destination when it comes to U.S. cities where people are most interested in moving for work, but it still trails several others, including San Francisco, New York, Los Angeles and more.

That finding is among many in a new economic research study out today from Glassdoor, the job and recruiting website. The study, Metro Movers: Where Are Americans Moving for Jobs, And Is It Worth It?, identifies, among other things, where job applicants are most interested in moving, where they’re interested in leaving, and which factors drive people to move for a new job.

The study is based on a sample of more than 668,000 online job applications started on Glassdoor during a one week period, from Jan. 8-14, for the 40 largest metro areas in the U.S.

“Metro movers” — defined by Glassdoor as job seekers located in one metro who start a job application in another metro — still find San Francisco to be the most attractive place to try to land work, despite a high cost of living and housing shortage.The city alone attracted 12.4 percent of all applications by job seekers looking to move cities. Seattle attracted 3.1 percent.

T1
It shouldn’t come as any surprise which company is attracting the most people, by far, to apply for work in Seattle.

T2
Companies in Providence, R.I., would appear to be having a hard time keeping people from leaving based on the fact that that city had the highest percentage of candidates applying for jobs elsewhere at 52.2 percent. The California cities of San Jose (47.6 percent), Riverside (47.3 percent) and Sacramento (44.4 percent) were in the top five, along with Baltimore (45.6 percent).

T3
So if you’re about to flee Providence or you’re trying to get to San Francisco, what’s the most attractive thing about where you’re applying?

Company culture is a top factor, according to the study — even more so than salary. A company with a 1-star higher overall Glassdoor rating is six times more likely to attract a candidate than a company that’s offering $10,000 more in salary, but has a lower culture rating.

But what do all of these metro movers want to do? A lot of them want to be engineers or developers. And, some will move for a new flight attendant gig.

T5
If all of this makes you just want to head to the bar for a drink, there’s good news there, too. If you like the person who serves you, it appears from the data that they’re not trying to go anywhere.

T6

~Kurt Schlosser, GeekWire

Crucial things to know before you hire a home inspector

home-inspectionHiring a home inspector before you make a purchase can save you thousands of dollars in unexpected repairs. But don’t assume every home inspector is the same.

Washington State law dictates the minimum standards for a residential home inspection. The state also requires home inspectors to complete 120 hours of special classes and 40 hours of field training and they must pass exams in order to obtain a home inspection license.

The best inspectors are also insured, and certified by a recognized home inspection certification organization.

While there are many excellent inspectors working in our state, unfortunately there are many who leave a lot to be desired. When you’re making one of the biggest investments you’ll ever make, you want someone who puts your best interest before keeping the deal alive.

Certified inspector Paul Rogers prides himself as being extremely thorough. So much so, that he says many real estate agents consider him a deal killer.
“I don’t kill the deal,” said Rogers. “I only report what the facts are. I have no vested interest in that property. My interest is in my client. Period.”

Ron Greene, a former electrical engineer, says he started doing residential inspections four years ago.

“I laugh when an agent tells me he hopes I don’t kill the deal,” said Greene. “I tell him, if the deal falls flat, it will be the home that killed it, not me.”
Greene says prospective home buyers need to understand that different home inspectors see things differently.

For example, one inspector might make note of swollen floor moldings. Another might investigate further to determine the actual cause of the swelling. Green also points out that some problems may not be easily detected by even the best inspectors.

Before you hire a home inspector, get referrals from other homeowners who give their inspector high marks.  Ideally, talk to more than one inspector and don’t limit your search to the few your agent suggests.
Find out everything the inspection will cover (review the state law linked above) and make note of anything that’s left out. Ask about their certification, and ask whether they have errors and omissions insurance, in case they miss something important.

Greene recommends home buyers also ask how long the inspection will take. He says even with a small home, a reasonably thorough inspection cannot be done in less than three hours and he typically takes 5 to 8 hours.
Local real estate agent Junior Torres says he gives his clients a list of questions including: How many inspections do you do in an average year?  According to Torres, more than around 30 inspections per month could mean the inspector is putting quantity over quality.

Rogers warns you should also be wary if the quoted price for the inspection is much lower than everyone else’s price. “You need to find somebody who is thorough, who isn’t discounting their inspection fee just to get the business,” Rogers said.

And even in this hot local housing market, where multiple bids are prompting many buyers to waive home inspections – the best home inspectors agree that waiving an inspection is never advised, especially with homes that have been flipped for fast profit.

~Connie Thompson, KOMO News

Seattle-area home-price growth from current boom has surpassed last decade’s bubble

BIZ-REAL-SEATTLE-BUBBLE-SE_t1170

SEATTLE – As the Seattle area continues its run as the nation’s hottest real estate market, it has now seen home prices surge upward for a full six years – with more growth in home values during the current boom than during past decade’s bubble.

Single-family home costs across the metro area grew 12.7 percent in February from a year earlier, the biggest increase in the nation for the 18th month in a row, according to the monthly Case-Shiller home price index, released last week. The report marked six years since home values bottomed out in February 2012. Since then, values have increased 85 percent – nearly triple the region’s historical average for a typical six-year span. Only San Francisco and Las Vegas had bigger gains during that period.

Even during the housing bubble last decade, prices didn’t rise this much. In the six years leading up to the peak of the bubble in 2007, Seattle-area prices grew a total of 73 percent before the bubble burst.

(During the bubble, home prices rocketed up quickly – fueled by lax and sometimes fraudulent mortgage lending that sowed the seeds for the Great Recession – but the peak surge only lasted a few years; this time, the growth has been steadier and keeps going and going.)

The recent boom locally has completely wiped out the effects of the recession on the housing market, when prices sank.

Local home values are now a bit higher than they were at the height of the bubble in 2007, even after accounting for inflation since then. Only Denver and Dallas have had price growth greater than Seattle’s since the old 2007 high.

There are no clear signs that we’re in another bubble. At the least, the elements that created last decade’s housing collapse – like homebuyers getting mortgages they couldn’t afford and rampant subprime lending – aren’t present this time around. The number of people defaulting on their mortgages locally is minuscule, for instance, and lenders are only issuing mortgages to people with good credit scores and financial assets.

A recession or other unexpected development – like a collapse at Amazon a la the Boeing bust of the 1970s – could change that, of course.

But for now the real-estate market shows no signs of slowing down amid record low supply of homes for sale and strong demand for homeownership. The Case-Shiller report noted that the Seattle metro area had the biggest job growth in the past year among the 20 regions covered in the report.

Compared with a month prior, home values increased 1.7 percent, according to the Case-Shiller data. The last time prices went up that much in a month was last summer.

The month-over-month growth also led the country, and was quadruple the national increase.

Seattle’s home-price increase of 12.7 percent, compared with a year earlier, was similar to the last several months and was again more than double the national rate of 6.3 percent.

Las Vegas again had the second-biggest home-price jump, and continues to heat up, with prices up 11.6 percent. San Francisco was close behind, followed by Denver, Detroit and Los Angeles.

Seattle home costs have grown more than 10 percent, year-over-year, for 26 months in a row. That’s pushed the median cost of a single-family house to $820,000 in Seattle and $926,000 on the Eastside. Even more affordable areas have recently hit record prices: $485,000 in Snohomish County, $350,000 in Pierce County and $341,000 in Kitsap County.

~Mike Rosenberg, The Seattle Times