Lennox's Real Estate Blog

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Archive for the ‘Market Trends’ Category

Should I Wait To Sell?

We are hearing this question every day and the answer is; IT DEPENDS!

Scenario One: If you are selling and not purchasing another property, even though market conditions create a positive environment for getting your home sold, you might wait for higher prices. This scenario does depend on your local market area and price range. The months’ supply will indicate the direction and velocity of prices. A low months’ supply equates to increased prices.

Remember: Local job growth is the #1 indicator of a healthy/strong housing market.

Scott Predictive Graph

 

Scenario Two: If you are selling your home and purchasing another property simultaneously.

1) It’s OK to Buy/Sell within the same market timing.

Factor to Watch: What is the months’ supply of inventory for your current home versus your next home. This will give you the base information to make a decision. It could be a situation where both your current home and your next home may both be going up in value.

2) Key Consideration: Interest rates.

Historically low interest rates; if you are going to use home mortgage financing on your next home purchase it may be a good time to move. Interest rates are expected to increase over the next year.

3) Greater Selection: More inventory appears to be coming on the market.

Sellers who have been waiting to sell, to get higher prices, and who are purchasing another home have noticed the interest rate increase. Many are moving forward with their plans to move. With more Sellers putting their home on the market, buyers will have a greater selection of homes for sale; though it will still be a quick action market.

Written by Lennox

June 20, 2013 at 3:38 pm

Major Housing Market Shift

This is a unique time in the real estate market. Here are the market facts for the Puget Sound region

Strong Sales Activity Being Driven by Local Home Buyer Surge

Driven by the return of local home buyers, a positive market psychology has returned. Low inventory, adjusted prices and the historically low interest rates combined with improving job growth have created a positive market for local home buyers. Starting in 2010 an elevated level of residential investors seized the opportunity to purchase homes and Read the rest of this entry »

Written by Lennox

May 2, 2012 at 3:52 pm

Seattle is a Special Market for Residential Real Estate

A sellers’ market has returned in the areas close to the job centers of Seattle and Bellevue, up to the one million dollar price point.  We are also seeing the same situation in the more affordable price ranges in the surrounding market areas, caused by a shortage of inventory and healthy/strong sales activity. Price increases are muted by short sales and foreclosures that are causing low appraisal values.

Unique market conditions prevail: Both low inventory and low interest rates at the same time.

Major factors leading to the current healthy/strong sales activity are positive job growth, population growth, home buyers taking advantage of the low rates and lower adjusted home prices, elevated number of investors in the market and historic low interest rates, in the upper 3% range.

The lower number of new listings coming on the market is being caused by under-water sellers and sellers with equity holding off for higher prices and the lack of new construction/condominiums. The low number of new listings combined with the increase in sales activity is creating the shortage of homes for sale on the market in specific areas and price ranges.

As always, thanks for reading.

Lennox

Written by Lennox

February 3, 2012 at 12:53 pm

King County Real Estate Sees Positive Shift

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Single-Family Inventory Levels Very Low Close To Job Centers

The psychology of the residential real estate market in King County is shifting in a more positive direction; the roller coaster has started to level out with single-family home inventory levels decreasing and prices stabilizing under $750,000 in markets close to the job centers in Seattle and Bellevue. Simultaneously there’s a pool of buyers that are motivated to take advantage of low interest rates and increased affordability. As a result, Read the rest of this entry »

Written by Lennox

March 25, 2011 at 5:09 pm

Puget Sound Housing Report 2010/2011

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Let’s start by reviewing what took place in the 2010 Puget Sound residential real estate market. Last year experienced a “surge/unsurge” with sales surging in first quarter thanks to historically low-interest rates and the Federal Home Buyer Tax Credit. But when the tax credit expired on April 30th, 2010, home sales took a dramatic drop.

Sales remained sluggish, but as the year progressed, inventory levels began to lower. By the end of 2010 the three-county area of King, Snohomish, and Pierce reported Read the rest of this entry »

Written by Lennox

February 22, 2011 at 1:16 pm

Talking Real Estate With Seattle Rotary

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On October 13, I had the immense honor of addressing the Seattle Rotary Club as a part of their weekly luncheon program.  This club is the largest in the world with 675 members, as well as the fourth oldest, founded in 1909. The last time I spoke to this esteemed audience I discussed technology and its impact on the real estate business. This time, I was asked to address the state of the residential real estate market – past, present, and future. The club was kind enough to record my presentation – which I will post below (entire presentation is broken out into 3 parts). A special thanks to Phil Smart for his witty commentary at the end of the Q & A – leave it to Phil to end it all on a high (and humorous) note.

As always, thanks for reading,

Lennox

 

Written by Lennox

October 17, 2010 at 10:39 pm

The New “Normal” In A Post-Boom Era

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As we look back at the real estate boom, it’s clear that many of us got used to the idea of quick home price appreciation. Real estate speculation became a game not just for investors, but for anyone with some equity and the desire to move. As we become accustomed to the post-boom market, our expectations for home price appreciation need to evolve as well.

From 1980 through 2010 (including six months forecasted for this year), home values appreciated on average 25% every five years. This average appreciation rate incorporates the post recession boom of the late 80s, the housing downturn of the early 90s, and the more recent boom and financial crisis of the past decade. The years since 2000 have been anything but normal. As a nation, we experienced extremely high real estate appreciation rates between 2002 and 2007, which were followed by historic price declines over the past three years. Though these appreciation and depreciation rates vary depending on area and price range, what seems to be true for all price points and regions is that homes are once again places of shelter—not get-rich-quick investments.

From this point forward, most homeowners will want to stay in their homes for three to five years to build up enough equity to make selling and moving a sound financial decision. This is because most major real estate economists anticipate that we will not see moderate appreciation in home value appreciation until 2011 and very gradual year-over-year improvement into the next decade.

The multi-year recoup period is historically normal: annual appreciation rates averaged 4.6 percent (compounded) per year since 1980, despite the many ups and downs over the past 30 years.  

Since they will most likely want to stay in their next home for at least three to five years, today’s buyers need to consider their near-and long-term plans as they shop. Growing families, retirement, children going off to college, or any other factor that could affect their budget or the amount of space they’ll need over the next several years should be taken into account.

Many homeowners and would-be buyers are wondering if it is a good time to sell or buy. We have seen valuations stabilizing in many areas and price points, and since current historically low interest rates equal greater purchasing power, sellers and buyers need to consider their individual situations carefully.

As normal appreciation rates return and become more familiar, we must realize that while real estate is still a good long-term investment, a home is about far more than money—there are many personal riches that come with owning a home, including those that fuel a healthier family and community.

Written by Lennox

June 24, 2010 at 1:53 pm

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