King County home prices grow $100,000 in a year for first time; West Bellevue jumps 41 percent

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The median King County home price has grown more than $100,000 in just a year.

Following up on a record-breaking spring, the county’s real-estate market had its hottest month of July since such monthly records began in 2000, with prices rising 18.6 percent from a year ago.

The new median price is $658,000, or $103,000 more than last July, according to monthly data released Monday by the Northwest Multiple Listing Service.

Just a down payment on the median house costs about $20,000 more than a year ago. So first-time buyers who didn’t save up that much in the past year are further from buying a house today than they were a year ago.

 

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George Moorhead of Bentley Properties in Bothell said his office is working with 60 first-time homebuyers right now — and it’s been a struggle to find something for any of them.

“First-time homebuyers are really feeling the pinch. Some of them have been looking for a home for almost two years,” Moorhead said. “They have to keep going further and further out just to find something that’s worthwhile. It’s just slim pickings out there.”

Trade-up buyers are dealing with a similar crunch. One-third of homes across the region sold for at least $1 million this past month, according to John L. Scott Real Estate.

“Anything between $900,000 and $1.3 million, you’ll still find yourself in a multiple-offer situation — six to 10 offers,” said Lori Holden Scott, a John L. Scott broker who deals with pricier homes.

While prices have been going up for so long that increases might seem inevitable, this month’s surge is actually a bit unusual.

 

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Median prices in Seattle ($749,000) and the Eastside ($860,000) did dip slightly from June’s record highs. Both were still up about 15 percent from a year prior.

West Bellevue had the county’s biggest price jump — up 41 percent from a year ago, to a new median price of $2.3 million, the priciest region in the county. Areas that saw prices zoom up more than 20 percent in the past year include West Seattle, Sodo/Beacon Hill, Central Seattle/Capitol Hill, Shoreline, East Bellevue and Redmond.

Countywide, the annual price increase in July was the largest ever in terms of absolute numbers. But the 18.6 percent growth was a bit slower than in some previous months.

“I don’t think anything is slowing down,” said Laurie Way, a managing broker at Coldwell Banker Bain in Seattle.

Both Moorhead and Way think the market has to cool a bit eventually; it’s just unclear how long that will take.

The very-long-running trend of declining inventory continues, as fewer people put homes up for sale while those properties that do hit the market get snatched up in about a week, on average.

And Moorhead said more repeat buyers are choosing to rent out their old homes, banking on getting steady rental income while knowing they could sell the home later — perhaps at an even higher price. He said his last four homebuyers all rented out their old homes.

The number of homes for sale across King County dropped 18 percent from a year ago and is at the lowest point on record for this time of year. Sales were down slightly, as well.

One bright spot for buyers: Condos across the county cost a median 5.7 percent more than a year ago, the second-slowest growth in the past two years.

 

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Downtown Seattle, where condos are the only homebuying option, actually saw prices drop a tick from a year ago. Enumclaw was the only place where single-family-home prices decreased.

Elsewhere, Snohomish County surged to a record median price of $453,000, growing 11.9 percent from a year ago.

Both Pierce and Kitsap counties dipped a bit compared with last month’s record prices, but they still were up significantly from a year ago. Pierce’s median price is $312,000, up 9.6 percent from a year ago, while Kitsap reached $322,000, an extra 11 percent from this past year.

~Mike Rosenberg, Seattle Times

The Seattle Area Housing Market: Big Demand, Little Supply

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Home buyers in the Seattle area are up against the toughest purchasing prospects in the country.

The Seattle Times cited the monthly Case-Shiller home price index, which showed a 12.3-percent year-over-year increase for single family home prices in the metro area in March. It’s the fastest growth in more than three years and easily outdistances increases in Portland (9.2 percent), Dallas (8.6 percent), Denver (8.4 percent) and Boston (7.7 percent).

Seattle also more than doubles the national average for price gains, which are at 5.8 percent.

Seattle-based real estate company Redfin released its Demand Index on Tuesday, and it shows what buyers are certainly learning the hard way as prime selling season approaches — there just aren’t enough houses available for interested parties.

Seattle is the most inventory-constrained metro, as measured by months of supply, but it also has the third smallest amount of inventory, following Oakland and San Francisco, Redfin said. Seattle posted the largest year-over-year decrease in inventory, down 35 percent from last April. In the same period, the number of Redfin customers making offers climbed by 36.9 percent, an indication that the market is more competitive for buyers this year than it was last year.

“There’s no indication that this market is going to see a drastic increase in supply or a drop in demand, so waiting isn’t an option for a serious buyer,” said Redfin Seattle agent Kyle Moss in the company’s blog post. “People intent on purchasing this season should be discerning and focus on the one or two criteria that are most important to them, like commute time and/or schools. From there, carve out a list of homes that meet your qualifications and work alongside an agent who has experience winning offers in competitive situations to build and execute a competitive strategy that fits your budget.”

That inventory crunch, in a city attracting thousands of new well-paid tech workers to companies such as Amazon, Facebook, Google, Expedia and others, is leading to the highest rate of bidding wars among the cities that Redfin tracks in other hot markers. In Seattle in April, 88.7 percent of homes received multiple offers, outpacing Los Angeles (79.3 percent), Oakland (78.6 percent), San Diego (77.5 percent) and Washington, D.C. (73.9 percent) among others.

The Times said extra offers often drive prices higher, and the typical single-family house in the city last month sold for a record $722,000.

~Kurt Schlosser, Geekwire

How to Find a Starter Home in a Hot Housing Market

An overheated real estate market can be a tough time for buyers in search of a budget-friendly starter home. But that’s exactly the type of real estate market 2017 is ushering in.

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According to a recent report from the National Association of Realtors (NAR), the share of households that believe the economy is improving soared to 72% in the first quarter of 2017. “Forty-seven percent believe that strongly, up from 45% in Q4 2016 and 44% one year ago in Q1 2016,” NAR said.

When there’s increased competition for homes, prices generally go up. (Go here to see how much house you can afford.)

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A new report from Redfin bears this out, revealing home prices in February increased 7.2% from a year earlier. What’s more, homes priced for less than $240,000 witnessed the highest appreciation — skyrocketing 8.4% year over year in February and 100% since the market lagged in 2012.

Combined with a lack of housing stock — Redfin reports a 6.4% decline in new listings in February — and you have what might be a daunting buying experience for newcomers.

With that in mind, here are five tips from experts on how best to snag a starter home right now.

1. Work with a professional

This may seem like less-than-helpful advice, but it’s the first suggestion most experts offer when discussing the predicament faced by first-time home buyers.

“You want someone who knows the neighborhood,” said Jessica Lautz, managing director of survey research and communications for NAR. “It could be difficult if you go it alone.”

Seek out an agent who is knowledgeable about the areas in which you’d like to search so you can help avoid these first-time homebuyer mistakes.

2. Get pre-approved before starting a search

Before discussing the pre-approval issue, it’s important to sort out your finances and to do it before embarking upon a search.

This effort should include reviewing your credit score. If it’s less-than-stellar, you can reach out to lenders for tips regarding how best to improve it, said Boston-based Redfin real estate agent James Gulden. You can view two of your credit scores for free, with helpful updates every two weeks, on Credit.com.

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“Sometimes people see their credit score and don’t know where to go from there,” said Gulden. “All lenders have different thresholds for what they’re willing to take on in terms of a buyer’s credit score. And they will also look at your employment profile.”

When you’re ready, it’s wise to obtain pre-approval for a mortgage before wading into the market. Not only will it ensure you lose no time when you’re ready to make an offer, it will help clarify what you can realistically afford.

3. Be prepared to make compromises

Even seasoned, older buyers make compromises. Whether it’s the price, condition or amenities, compromising is part of the process.

“It’s more common for millennials to make compromises on first homes, but all buyers really do compromise on something,” said Lautz.

Translation: Figure out what you are willing to let go of or do without.

4. Be patient

Buying a home is a process, no matter how much money you have. So mentally prepare yourself for the process, including the ups and the downs. Preparing for the downs includes not getting too attached to any one house.

“It’s easy to lose a couple and say, ‘Forget this, we’ll keep renting,’” said Gulden. “A lot of people are losing out on the first five or six homes they submit an offer on before being successful. From a mental standpoint, it’s very easy to get connected to a place, and when you don’t win a place, it can be upsetting. But in this market, it’s important to be able to brush it off and realize there are other places that will be coming onto the market.”

5. Write a personal letter

Gulden admitted this tip is not exactly novel, but it can give you an edge in a particularly competitive market.

Writing a personal letter to the seller, enclosed with your offer, can help set you apart when there are 10, 15 or even 20 more offers. And those numbers are no exaggeration, said Gulden, who recently helped clients submit an offer for a Cambridge property with 24 bids.

“If you don’t include a letter or something to differentiate yourself from others, then it’s all just numbers and dates on paper for the seller,” said Gulden. “Introducing yourself and telling the buyer who you are, why you like the property makes a big difference.”

~Mia Taylor, USA Today