February’s Eastside stats are in! Month-over-month, supply decreased by 5% to 1.9 months, which puts us solidly in a seller’s market. That said, it’s a stark difference from this time last year where we were at 0.8 months of an inventory—42% lower (70 miles per hour now vs 166 miles per hour then). Evidence of the changed market shows in the number of homes with multiple offers—20% in 2019 vs 51% in 2018. Also, the median amount over asking price is 2% now vs 8% in 2018.
Year-over-year, median prices are down 9%, this is combined condos and single family homes. I don’t put much weight in this number, as there are many, many variables to this. If you look only at single-family we are off by 5%, this feels more accurate, as prices escalated to their height in the February/March timeframe last year. I expect this number to flatten after May.
March is proving to be robust with lots of buyer activity, so I think our more balanced-yet-still-a-seller’s market will be our new normal for the next couple of months which makes it a great time to buy and/or sell.
I am proud of the Windermere Foundation. It’s a huge part of why I love Windermere. I had the privilege to be on the board for 3 years, so I witnessed the integrity and awesomeness of the program. We give back to our communities and the families in those communities. Good stuff!
January’s Eastside stats are in! Year-over-year median prices are up 2%, but for single family homes only, prices are down 3%. Basically, prices are flat, as pricing is tricky to gauge (due to variations in home sizes, condition, location, ect). Also, 12% of homes did sell over asking price, many of these were after a price drop, which illustrates the price sensitive nature of our market.
Months of inventory is at 2.0 based on pending sales, but if you look at closed sales the number is 3.1. Anything less than 3 months of inventory is a seller’s market, so we are still in a seller’s market leaning towards a balanced market. Year-over-year, this is a 122% increase in inventory. This makes sense, as there were 130% more active listings, 23% more new listings, and 17% less pendings in January 2019 versus 2018. It’s clear the market has changed, but is still strong—just not crazy. Again, we are now traveling at 70 miles per hour vs 155 miles per hour.
Yes, the snow has slowed things down, but mostly new listings coming on the market. Also, it is challenging showing home in the snow—what does the yard really look like? That said, homes are still selling. In fact, both my new listings sold. With mid-winter break next week, it will be interesting to see if there is a flurry (pun intended) of new listings after or during.
I’m pleased to present this fantastic, view condo in Washington Square, one of downtown Bellevue’s premier condo high-rises. There are many things to love, but the two walls of floor-to-ceiling windows are my favorite. That said, the location is unbeatable—walkable to shops and restaurants, as well as the Bellevue Library, Bellevue Park and the Bellevue Transit center.
Open: Saturday, January 26th, from 1 PM to 3 PM
Address: 10610 NE 9th Pl, #2202, Bellevue 98004
Details: 2 bedrooms | 2 baths | 1,173 sq ft | Built in 2008 | 2 parking spaces in the secure garage
More photos and information: http://sanditampa.com/listing/90408820
December’s stats are in! We are still in a seller’s market with 2.4 months of inventory, but the effects of having 200% more inventory from last year is illustrated by the flat year-over-year price appreciation. It’s like pricing rewound a year. That said, we are 2 weeks into the new year and buyer activity is strong.
What a year it has been for both the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.
The U.S. Economy
Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.
Firstly, any cyclical downturn will not be driven by housing. Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.
The U.S. Housing Market
Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market. In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.
Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017. In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.
New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.
That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.
In last year’s forecast I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.
In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or leveling. We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.
I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.
There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating. In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.
That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.
Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
This is a fun recap of Windermere for Kids Day. Three out of four years, Windermere East, Inc uses our holiday party money to provide Christmas gifts for local families. It’s an elaborate process of first finding the families—my office’s families came from Lake Hills Elementary—then meeting with the families to create wish lists for each member of the family. Then, we meet at 8 AM at Target and shop with a child (the ‘little shopper’, who has been pre-shopped for) from that family. Presents are then wrapped while the families enjoy snacks, crafts and photos with Santa. It’s a feel-good day with meaningful results. Many ‘little shoppers’, including mine, are not allowed to be photographed, so you won’t see me, but I was there enjoying every minute. Thanks Windermere!
November stats are in! The market appears to be stabilizing with both October and November having 2.4 months of inventory. Anything less than 3 months of inventory is a Seller’s Market, so we are in a Seller’s Market. Home that are in good condition and well-priced will sell quickly and might go over the asking price. 14% of the homes in November closed over asking price versus November 2017 where 43% sold over asking price (when months of inventory were crazy low at 0.8 months).
Year-over-year we are showing an 11% increase in median pricing; however, this includes condos. If you remove condos from the mix the year-over-year price increase is 4%–this feels more accurate.
Buyer activity in December is strong and there are deals to be had. It’s a great time to be both a buyer and a seller. I can’t wait to see if we will have the typical surge in activity this January.
We are ready for Santa’s visit tomorrow! Please join us if you can! Details:
11 AM to 2 PM–Dogs welcome from 1 PM to 2 PM
Windermere, Bellevue South, 14405 SE 36th St, Bellevue
Photos will be emailed to you a few days after the event.