There’s no doubt, in Northwest Washington we have seen significant growth and stability in the housing market. Seattle alone is one of the top 10 markets in the country, and much of that Seattle market momentum is being realized abroad. Thurston County has seen a consistently short supply in available housing, which makes for a strong seller’s market. The further North you travel from Olympia towards Seattle, the trend is even more in favor of sellers. Inventory has been difficult to keep, and the trend is changing slightly as more new construction and resale hits the market in a ‘bandwagon’ effect. It’s fascinating to see what market trends promote every year, and this particular year will involve an increase in repeat and move-up buyers. Here’s some reasons why:
1. Homeowners that were once underwater are seeing the light of positive equity. Unfortunately, some consumers purchased at the peak of the boom market in 2005-2007, and have either done a short sale, foreclosure, or held on for dear life. It’s been a long and twisted road since then, and the market has been shifting for the better since 2011 – offering a level of stability that hasn’t been seen for a long time. It may be enough for many current homeowners and ‘used to be’ homeowners to move forward as repeat buyers.
2. Foreclosures and distressed properties have been marginalized in this market. This is great news for a more stable market. Even so, our market professionals have had the time and experience to navigate and streamline the processes for closing on distressed properties. The activity of buying a short sale home or repo is not nearly as daunting as it was during the market crash, which contributes to the consumer confidence we have now.
3. Demand for resale housing has been consistently on the rise. As I mentioned earlier, the demand for housing has been on an upswing once the markets stabilized in 2011 - particularly in areas in near proximity to the I-5 corridor. This will be even more critical as millennials and repeat buyers will continue to drive the market with a need for housing. Homeowners wanting to bank on the resale market are in a unique position, as the common seasonal ebb and flow of market activity will no longer be of concern. Conventional wisdom has suggested that Spring and Summer are the best times to sell, but that line of thinking is only more useful in softer markets – we have seen strong consistent sales 12 months out of the year on a consistent basis for a few years now.
4. Investors and First-Time buyers will buy less. For the last few years, investors have been instrumental in helping contribute to the strength of the market we have now. Since distressed inventory levels are very low, this will cause less market activity for investors. Resale non-distressed homes and new construction will continue to dominate the market, and consumers are paying more now to purchase a home than for the last several years. This is all conducive to more confidence in the market, a stronger overall financial viability, and a simple natural increase in demand for housing.
5. Mortgage rates and market activity are causing a ‘time is of the essence’ mentality. Resale buyers are already experiencing the pressure of competition with other buyers. The old phrase ‘If you sleep on it tonight, someone else will be sleeping in it tomorrow’ is ever so true in this market. And as we are at some point anticipating a market correction, we are also witnessing rates starting to slowly go up. Rate locks are important to buyers – lock it while the rate is low and affordable. But those rate locks have a short timeline before they need to be used.
So, to my repeat buyer crowd - get ready, there’s a lot to prepare for to be successful in this market. First, take a good look at your financial picture with your lender, and discuss your options. Is it better to hold your current home as an investment and buy again, or do you need to sell in order to move up? With an understanding of your purchasing power, put your goals and plans together and take full advantage of the opportunities available in this market. Please contact me when you’re ready for more guidance on the next step in this journey, as I will be your strongest advocate in turning your plans into reality.