Supply of Seattle-area homes hits lowest point recorded
Seattle area hits the No. 4 hottest home sellers’ market in the United States indicating that bidding wars and red-hot prices will likely continue. The top five sellers’ markets in the Puget Sound region are: Seattle, Duvall, Bothell, Bellevue and Lake Forest Park.
Contributing to the sellers’ market is the fact that the greater Seattle metro area seems to have the lowest recorded supply of homes for sale. The region, which includes King and Snohomish counties, has a supply of only 2.2 months matching the same hyper-competitive housing market of San Francisco. The Eastside has less than a month of open inventory, i.e., homes listed for sale.
The mantra seems to be: fewer houses, higher costs. The median price of a home in the Puget Sound region climbed to $385,700 in March which is an 11.8% increase from March last year.
Due to the low supply and frenzy of buying activity, experts say buyers should expect to put in multiple offers before one is accepted. One MLS director said that, “Listings are flying off the shelf faster than allergy medicine in this early spring market.”
Seattle’s housing market is no doubt heating up in part because of the hotbed of new tech activity, with Uber, Best Buy and SpaceX opening offices in the last couple months and bringing higher-end wage earners to the area.
Seattle similar to San Francisco?
Some have said that Seattle will eventually be very much like it’s southern neighbor, San Francisco because we share many of the same dynamics, i.e., limited in-close build-able land, a water boundary, and for us, a mountain boundary, a concentration of well-paying jobs, increasing population, etc.
As an FYI: today, more than half of all homes in the San Francisco market are now selling for over $1 million. The region had the third-highest rate of price growth, at 17.7 percent year over year. The median sale price was $1,060,000 last month. – Puget Sound Business Journal
Check the chart below for another reason homes are selling so quickly… Interest rates affect two things: the total dollar amount one is eligible to finance and one’s monthly payments.
From Freddie blog: Over the past few years, we’ve enjoyed a long run of historically low mortgage rates. While no one expects them to change dramatically overnight, they are expected to head up. Most experts agree that mortgage rates will drift up in the coming months to end the year approaching 4.50% which calculates to about an additional $100/month payment, principal and interest, on a $200,000 purchase. Oh, and check out those 1981 rates.