|2010 - The Year Ahead|
Our greater Seattle-Bellevue real estate market is really in a state of flux right now, with lots of opposing forces trying to push parts of it around. In the Market Overview section below I will try to show what those opposing forces are, and then in a following series of posts over the next few weeks, I’ll try to describe a little more about each of those forces and how it affects us.
If you want to follow along with us in this interesting year, please go to our Greater Seattle Homes Today blog, and click the little gold fan-flag at the top.
|Real Estate Market Overview|
As noted in the opening paragraph, our greater Seattle-Bellevue real estate market is really in a state of flux right now, with lots of opposing forces trying to push parts of it around. Here’s the major forces, plus and minus, that I see in the market right now.
On the Plus side:
- The First-Time Homebuyers Tax Credit - $8,000 until end of April
- The Move-Up Homebuyers Tax Credit - $6,500 until end of April
- Developing shortage of single-family homes under $700,000
- Loosening credit for jumbo loans on homes and condos over $700,000
- Availability of FHA 203K loans to help buyers fix up distressed homes
- Increased federal pressure on banks to do loan modifications and reduce short sales
- New federal rules to reduce uncertainty and speed up short sales
On the Minus side:
- Uncertainty about extension of the homebuyer tax credit programs into the second half of 2010
- Potential interest rate rise and mortgage rate increases later in the year
- Rising reset problems with Option-ARM mortgages forcing more short sales and foreclosures
- Banks potentially getting more aggressive on foreclosures and selling repossessed properties
- New FHA rules that will reduce the number of FHA-qualified condominium complexes
Conclusions: Limited supply of available single family homes and improved financing availability for higher-end homes may conspire to push median prices up a bit, in spite of the downside pressure from short sales. For condominiums, the new FHA certification rules may tend to split the market, with well-run FHA-certified complexes drawing a premium for their owner/sellers, and less well run and maintained places suffering some price erosion due to buyer’s concerns about long-term value.
Overall I think this will be a fairly steady range-bound market, with moves in the range of plus or minus 5% for various segments. In support of my cautious optimism, please recall that we are now working our way up out of a severe recession, the federal government will do everything it can to support and stabilize the housing market, and Seattle is still a very desirable place to live and work.
|Current Market Statistics|
The links below provide a graphical summary of Real Estate Market Statistics for the Seattle/Bellevue/King County area over the most recent 2+ years, for single-family homes and for condominiums. The volume of residential closed sales is seasonally bottoming, and next month should mark the low point for recording closed sales of transactions initiated in December, then the numbers will start rising again strongly in February and on into the Spring market.
Median prices have been holding steady for both residential and condomium homes, within a 5% range over the last 10 months, and the number of homes available is staying well below 2007 and 2008 levels. Months-Supply, a key measure of market health, continues to drop for Residential, now down to below 5 months, well below the magic balance point of 6 months, and significantly lower than a year ago. The Condominium months-supply, unfortunately, is holding well above 6 months, and may be rising, although one-month alone does not make a trend. The large Pending-Sale backlog may be starting to drop, with fewer transactions hung up in escrow on financing and short-sale issues.
Here's the charts for the current stats through December: (Required disclaimer: Statistics and graphs not compiled, reviewed or verified by the Northwest Multiple Listing Service)
The number of sales transactions closed for single-family homes continued to run above 2008 levels, now ten months running, and condominium sales have also been running above year-ago levels for the last few months. Inventory of homes for sale continues to run significantly below year-ago levels, roughly 20% lower for Residential and 10% lower for Condominium.
By the way, all of our articles are also posted on our Greater Seattle Homes Today blog, along with other articles on related topics and things of interest in the Greater Seattle area. If you want to track along with us, please go to our Greater Seattle Homes Today blog, and click the little gold fan-flag at the top.