Seattle’s hot housing market

Hot September Market Chart
According to the latest statistics from the Seattle Times, the housing market is still hot. “Homes sold last month in King County were on the market an average 37 days, compared with 52 days for homes sold the previous September. Properties in neighboring counties also were snapped up faster than a year ago.” The article notes that while home prices in Boston and Washington DC have started to decline, our market stays strong.

Interestingly, the home market has remained strong despite the recent increases in interest rates. Frank Nothaft, chief economist at Freddie Mac is quoted in the Seattle PI as saying “The most likely pattern is for mortgage rates to gradually rise over time. It is likely that they’ll hover at 6 percent or just a bit over.” He added that “will translate into somewhat weaker demand for housing, lower home sales volume and lower house price growth.”

Further interest rate increases by the Federal Reserve will likely increase rates even higher:

At the same time, a few consumers prospecting for properties – especially those prequalified by lenders – may be spurred into action by the rising interest rates.

“People may start buying before it (the mortgage rate) goes up any more,” Binczewksi said. “They would make offers because they have rate locks. Now, with rates increasing, they won’t want to lose rate locks.”Further interest rate increases by the Federal Reserve probably will push ARM rates even higher, analysts said.

With the rapid growth in home prices, I’ve seen many of my clients opting for smaller homes and/or condos. The Time article reflects this pattern by showing the the total number of available condos is way down (1,347, compared with 2,121 a year earlier) while the median price is up ($229,950, up from $205,000).

2 thoughts on “Seattle’s hot housing market

  1. Believe me, home prices here in the DC area have not fallen. I don’t know if they ever have, and I don’t know if they ever will, save the eventual calamitous domino effects upon our society that something like Hubbert’s Peak might bring. The economy here is virtually recession proof. What happened instead is that the rate of home price increase (acceleration) has simply slowed. HUGE difference.

    I moved here from Seattle in summer 2001, and became a homeowner in 2003. I watched in horror as DC-area home prices not only caught up with but surpassed Seattle’s in the interim. My home in the northern suburbs (MD) has *more than doubled in value* in the two-plus years I’ve owned it. I live in a decent, safe area, a half-block from a miles-long wooded creek park, 25 minute walk to the Metro subway, etc.

    When I left Seattle, I couldn’t even think of buying a house, but now I’d love to move back to Seattle and buy what is now very affordable (and always more beautiful) real estate — sadly for me, that isn’t to be for now…

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