Realogics Sotheby’s International Realty presents a look at the housing market trends for the fourth quarter of 2018, from the shores of Bainbridge Island’s waterfront homes and in-city living opportunities to the Eastside’s most distinguished residences.Read More
Realogics Sotheby’s International Realty presents a look at the housing market trends for the third quarter of 2018, from the shores of Bainbridge Island’s waterfront homes and in-city living opportunities to the Eastside’s most distinguished residences.
Seattle | Single-Family Homes
Inventory continues to remain at the center of real estate conversations in Seattle, as the frenetic market of recent years has given way to a more balanced one that reflects typical seasonal trends. In Q3-2018 we saw 2.7 months of inventory, up nearly 75% compared to last quarter (at 1.2 months) and a staggering 156.5% on a yearly basis. View report>>
Eastside | Single-Family Homes
Record-breaking home price growth for single-family homes on the Eastside moderated from Q3-2017 to Q3-2018 with a 7.11% gain, a stark difference from last year’s report, which showed a 14.80% increase in median home prices from Q3-2016 to Q3-2017. View report >>
Bainbridge Island | Single-Family Homes
While Seattle and the Eastside saw slight decreases in the average median sales price from the second to third quarter of 2018, home prices on Bainbridge Island increased on a quarter-by-quarter basis, from $865,000 in Q2 to $912,000 in Q2, representing a 5.4 percent increase (larger than the 2.3% year-over-year gain). View report >>
Seattle | Condominiums
As was the case in Seattle’s single-family market, the number of homes available for sale is dominating real estate discussions, as the condominium market in Seattle saw 2.7 months of inventory in the third quarter of 2018, the highest number reported since the third quarter of 2012, when we nearly reached a balanced market at 2.9 months. Since that time, inventory has continued to dip, maintaining numbers well below 1 month in every quarter since the start of 2015. View report >>
Realogics Sotheby’s International Realty presents a look at the housing market trends for the second quarter of 2018, from the shores of Bainbridge Island’s waterfront homes and in-city living opportunities to the Eastside’s most distinguished residences.
Seattle | Single-Family Homes
Seattle continues its red-hot housing market streak, as the median sales price of a single-family home hit $857K, up 13.1% compared to Q2-2017, which averaged $758K. View report>>
Eastside | Single-Family Homes
Home prices on the Eastside continued their upward climb, increasing 12% year-over-year, while days on market decreased to just over two weeks. View report >>
Bainbridge Island | Single-Family Homes
Though other areas experienced increased inventory, Bainbridge Island saw a decrease of homes for sale with just 1.8 months of inventory, as the days on market fell 40%. View report >>
Seattle | Condominiums
Condominiums in Seattle continue to draw buyers, as the average days on market in Q2-2018 was 14 days and the average sales price reached $514,000. View report >>
Realogics Sotheby’s International Realty presents a look at the housing market trends for the first quarter of 2018, from the shores of Bainbridge Island’s waterfront homes and in-city living opportunities to the Eastside’s most distinguished residences.
Seattle | Single Family Homes
Seattle home prices remained red hot in the first quarter of 2018, as the median sales price reached $917,000, up over $30K from the final quarter of 2017 and 14.2% year-over-year. View report here.
Eastside | Residential
A shortage of homes available continues on the Eastside, as the average days on market decreased by 5 days to just under one month with the average sales price up 13.2%. View report here.
Bainbridge Island | Residential
Bainbridge Island continues to attract buyers, as the number of homes sold was up just over 28% from Q1-2017 despite a sharp 60.7% inventory decrease. View report here.
Seattle | Condominiums
Condominiums in Seattle continue to attract buyers as the average days on market in Q1-2018 was 15 days, down a staggering 34.8% compared to the first quarter of 2017. View report here.
A new report by Cicely Wedgeworth for realtor.com has shown that the 2017 housing market is going to be shaken up by an influx of prospective first-time millennial home buyers. Here is what you need to know:
The Great Real Estate Revolution Of 2017
According to a recent survey by realtor.com, in 2016, only 33% of people planning on purchasing a home were first-time buyers. This upcoming year, however, is slated to see a dramatic increase in this demographic, which is expected to jump to 52%, of which, a staggering 61% of perspective buyers are under the age of 35. This means that the 2017 real estate market will subsequently see an increase in competition for housing amongst first time home buyers.
Competition Will Be Intense
With this influx of first time millennial home buyers, the competition for housing within the real estate market will be more substantial than 2016. Jonathan Smoke, chief economist for realtor.com, recommends trying to “’avoid bidding wars and higher prices spurred by a potential increase in millennial buyers’” by considering a winter home purchase. When examining the 2017 real estate market, it is also important to investigate which types of properties will be the most sought after.
In 2017, more millennials will be moving away from renting and towards first time home ownership. With this trend, we see a migration of this demographic away from urban areas and towards the suburbs. According to the recent realtor.com survey, both 50% of millennials and baby-boomers report interest in living either in the suburbs or outlying suburbs. This trend will create increased competition within the market for properties located in these areas.
Baby-Boomers And Millennials Competing Within The Real Estate Market
It seems that the suburbs are not the only thing that baby-boomers and millennials can agree on. With millennials prioritizing a sound financial investment, there will be a focus on “safety, privacy and more space” according to realtor.com. There is expected to be an increase in this demographic seeking single-family homes and townhomes. Babyboomers have a similar focus within their demographic, with 71% of perspective buyers seeking single-family homes.
With both demographics seeking these types properties, it can be expected that these single-family homes will be in high demands, driving costs upwards and availability down.
To read more, please visit: Realtor.com | First-Time Millennial Buyers Poised to Revolutionize the Real Estate Market in 2017
The popular West Coast cities of San Francisco, Los Angeles and Vancouver have long been the most direct routes to New World prosperity for Asian immigrants and their families. Now that generations of Chinese buyers have transitioned to life in North America, their experience and trend spotting is bringing to bear more practical considerations of economic fundamentals, financial and educational opportunities, and overall quality of life. So it’s no surprise that relative affordability, propensity for capital appreciation and even a recently imposed 15-percent foreign homebuyer tax in Vancouver, are boosting interest in alternative markets like Seattle—the next international gateway city on the rise.
Matthew Moore, President of the Americas for Juwai.com, a popular residential real estate search portal in China, noted significant changes: “Juwai.com buying enquiries to Seattle increased by 143 percent in August 2016, compared to one year earlier. Meanwhile buying enquiries to Vancouver dropped by 81 percent during the same period, with all of that drop concentrated in the premium end of the market.”
The forested mountains and deep blue waters of Puget Sound, together with high-quality schools, a vibrant and diversified economy, and absence of a state income tax (unlike California) have drawn a gathering surge of Chinese buyers to the Greater Seattle region in recent years. Somewhat overlooked by past generations of immigrants in comparison with Vancouver BC and San Francisco, the Pacific Northwest has so far avoided the trap of high growth fueled by non-resident real estate investment. Yet, industry experts believe that’s coming and likely part of the draw. To the trained eye, Seattle, and especially Bellevue, is looking more and more like Vancouver, albeit about twenty years its junior.
According to the latest S&P/Case-Shiller, home values rose 10.8% year-over-year and 2.4% from February to March 2016, setting a new benchmark in home values and surpassing the previous peak in the summer of 2007. The significant growth has caught some by surprise but for those close to the industry, Seattle is simply catching up to other West Coast gateway cities such as San Francisco or Vancouver, BC. In fact, a recent Seattle Times article highlights that Seattle had the second highest metro area home price increase year-over-year, rising 10.8% in March (only Portland exceeded Seattle, which rose 12.3%). Seattle, however, was actually the fastest rising market month-over-month in March, increasing 2.4%.
So is this a bubble? Probably not, suggests Jon Talton of The Seattle Times. He takes into consideration that the Great Recession and the housing market decline that began in 2008 were caused by a glut of subprime mortgages and too many unqualified homebuyers speculating in the market. This along with eager mezzanine financing led to a misread of demand by many developers that oversupplied the market with inventory. Nowadays the opposite effect is playing out where there is anemic inventory, especially in downtown Seattle, according to Dean Jones, President & CEO of Realogics Sotheby’s International Realty. He suggests the market may have “overcorrected.”
Jones made some predictions about the state of the in-city housing market a year ago when he participated in the article “Manhattanziation of Seattle” by Cynthia Flash of the Puget Sound Business Journal.
For the most part the upward pressure on pricing has occurred and the ongoing comparisons to Seattle becoming more and more like San Francisco was best summed up in a recent interview with Gregg Lynn, a top-producing condominium broker in California based in San Francisco at Sotheby’s International Realty. So, will Seattle end up like San Francisco over the next few years? Check out why Lynn says he “can’t see it not happening” and more, in the full video.
“It looks like at least two of the planned developments in the pipeline we’ve been monitoring will not be condominiums after all, but will arrive as more apartment inventory for rent,” said Jones. “This makes the arrival of NEXUS even more anticipated.”
NEXUS is certainly turning heads given its stunning lifestyle proposition, but its underlying economics are also changing consumer mindsets about renting.
A recent analysis conducted by members of the development, marketing and lending team at NEXUS revealed a typical one bedroom condominium at NEXUS could be considerably less expensive to own than rent, given the nature of low interest rates and a rising real estate market as well as the substantial income tax credits that only homeowners enjoy.
Here’s how a summary of how this scenario breaks down on a typical one bedroom residence (data subject to change):
This hypothetical condominium of 650-sq. ft. (gross architectural measurements) is priced for $568,750 ($825 per sq. ft.) and is purchased with a 5% down payment or $28,438. With a loan amount of $540,312 the principal and interest payments would be approximately $2,658 per month (assuming a 30-year fixed rate mortgage at 4.125% PAR rate) with a preferred credit score of 740 or better and provided this condominium is used as a primary residence by the borrower. Given the higher loan to value, the owner would require mortgage insurance, which is calculated at $265 per month plus there’s property taxes estimated at $427 per month and HOA dues estimated at $480 per month. This totals a monthly cost of $3,830 per month or $45,960 per year. A homeowner, however, also enjoys income tax deductions, which were factored at the 0.28% rate so the effective cost of ownership on an annual basis works out to about $35,412. Factoring the actual cost of the first year must include the additional earnest money deposit (a one time investment), so it is estimated that the total first year cost of housing for a condominium is $63,849.
Now take this math into the second year and the cost of ownership stays the same because the mortgage is fixed, but assuming a 5% median home price increase in the market (recent increases have been substantially higher) it’s fair to suggest this condominium appreciated $28,438 by the second year, which is an equity gain. Repeat this again in a third year and consider the cumulative investment would total $106,236 in cash while the cumulative equity gain could be $58,237 so the net housing cost with appreciation is more like $47,939. Furthermore, the down payment of $28,437 that was invested three years ago is still your money that you get back should you decide to sell and that capital appreciation experienced is likely not taxable given current IRS policies for principle residence gains (up to $250,000 for a single person and up to $500,000 for a married couple). This doesn’t include the cost of selling, which must also be factored.
As an apartment renter, the consumer would still provide a security deposit (typically one month of rent) and at prevailing luxury apartment rents of $4.00 per sq. ft., this 650-sq. ft. unit (gross architectural measurements) would likely rent for $2,600 per month plus parking of $175 per month so let’s say the total cost is $2,775 per month or $35,600 per year. Now remember that rent offers no income tax deduction so this same consumer is paying full taxes, and apartments don’t appreciate (at least not for the resident) so there’s no possibility for capital gains. Conversely, apartments typically experience rent increases annually (Seattle rents rose by at least 40% in the past five years) so if we apply the same 5% increase of rent as we presumed for the condominium appreciation above, then the same apartment would cost more and more each year. By the third year the renter will have paid $104,033 for an accommodation that offers convenience but no financial upside.
Of course, owning isn’t right for everyone. If you plan to stay in one place for more than a few years and the market continues to trend upwards as it has in recent years, however, then owning can provide significant economic benefits for the savvy consumer. And one primary benefit of presales is the price is set at the time the Purchase and Sale Agreement is accepted, so it’s not uncommon for values upon completion to be even higher still.
In a recent Puget Sound Business Journal article, Emily Parkhurst declares that “This is the best time to list your house for sale in Seattle.” The dates she’s referring to? The first couple of weeks in May. As the feature describes, “houses listed between May 1 and May 15 sell 20 days faster than the yearly average.” What’s more? “They also sell for an average of $2,600 more.” These dates apply to most of the market in the United States, but are even weightier in a market as hot as Seattle’s.
May will thus mark an especially significant time to list in the already favorable market. As the Puget Sound Real Estate Trends & 2015 Year in Review, released by Realogics Sotheby’s International Realty, explains, the year 2015 witnessed white-hot real estate conditions throughout the Puget Sound not seen since before the Great Recession. Prices of real estate throughout the Puget Sound catapulted higher in 2015 and a similar trajectory is expected in 2016: expanding demand, anemic supply and developers playing catch up to increasing homeownership levels.
For those of us from the Seattle area, it’s easy say we think our city is the best. Now, however, we have scientific, data-driven proof, as Forbes published its list of the Top 20 Coolest Cities in the U.S., and our gorgeous Emerald City ranked #2!
The Seattle PI, who reported on this achievement, explained that Forbes considered “entertainment, number of restaurants and bars, recreation, diversity and population growth, especially in the 20-34 age group,” which speaks to the growing millennial population in the city, often correlated with the high number of technology companies that dwell here. Other factors that elevated Seattle to the near-top? Forbes notes its “abundant outdoor attractions” and its “foodie culture” as the “city has a relatively high preponderance of farmer’s markets, breweries, & CSAs per capita, compared to other metro areas, and 81.6% of its restaurants are local rather than chains.”
CNN Money reports that Seattle is among one of the best cities for millennials to settle in saying the city’s “high-paying tech jobs attract lots of young workers — and its vast coffee culture keeps them firing on all cylinders.” In fact, many millennials have already recognized the benefits of Seattle, as the article describes that “between 2010 and 1012, 28% of all people moving into the city were Millennials, five percentage points higher than the average major city, according to the National Association of Realtors.” They also say that high home prices aren’t deterring a number of “young, well-paid buyers,” an interesting factor considering the recent surge found in the median sale price of Seattle homes.
In fact, prices have reached heights beyond those of the 2007 peak, this according toCurbed Seattle, who reported that, “the median price of single-family homes sold in Seattle rose last month to $543,400, blowing away the last peak of $501,000 set in August 2007 – before the housing bubble burst and the country went into the Great Recession. The reason for the surge? Curbed says “in spite of the fact that there are 1,550 more residences on the market compared to July 2013, availability still isn’t meeting demand,” adding that “low employment numbers and the ongoing influx of tech workers [which speaks to the Millennial appeal] has to be factored in as well.”
So how are consumers responding to these higher prices and market growth? They’re feeling pretty confident according to Seattle Bubble, who says that as of July, “the overall Consumer Confidence Index” was “at 90.9, up 5 percent in a month, 12 percent from a year ago, and at its highest point since October 2007.” A sure sign that consumers are trusting higher home prices and feel assured by the Seattle market.
You've probably heard by now that Zillow purchased Trulia in a $3.5 billion deal, and it's left many wondering what the effect on the real estate market will be. The Puget Sound Business Journal reports that real estate agencies in the Pacific Northwest agree that it won't be bad for business. The article reads, "[t]here are literally hundreds of real estate aggregating websites out there, said Dean Jones, owner and CEO of Realogics Sotheby's International Realty. Because there are so many places for people to find listings, he expects the expanded Zillow to take a cautious approach to raising its prices because agents could easily advertise elsewhere."
With the Zillow/Trulia company set to control up to 70% of online real estate listings, it will be interesting to see how this merger plays out in the coming months.
The NY Times says that despite debt problems, The World Bank predicts that China will likely meet its 7.5% economic growth target this year. While The World Bank remains optimistic, saying that China’s growth momentum will accelerate as 2014 moves on, many private economists aren’t so sure. Their worry comes from China’s debt, following the 4 trillion renminbi ($585 billion USD) stimulus the government implemented during the financial crisis in 2008-9; a debt that will require China to rethink fiscal and financial policies and systems. Something everyone is excited about? China, traditionally focusing on export and investment, is also turning toward domestic consumption.
The RSIR Blog writes, "when looking at the Seattle real estate market these days, growth continues to emerge as a key factor. Chris Daniels and Jake Whittenberg from King 5 newsreport that Seattle grew 2.8% in the last year alone, citing Leonard Garfield, the Executive Director of the Museum of History and Industry, who told King 5 he attributes growth to Amazon and other tech companies that are looking for “cheaper property outside the Silicon Valley and Bay Areas.” In addition, many neighborhoods have already exceeded their 2024 growth targets. One notable neighborhood is Ballard, which has already soared to 317% of its target.
Growth means home prices have surged, a trend Sanjay Bhatt from The Seattle Times describes. He says that in March, Seattle posted “the biggest gain among all metro areas except San Francisco” and adds that home prices have risen 11.6% in the last year and are expected to rise continue to rise by another 6% in the coming year."
"So what does all this mean? For one thing, growth and higher home prices make for a competitive real estate market in Seattle. Sam DeBord from the Seattle Pi describes the difficulty many first-time homebuyers are experiencing in a climate where homes sell for an average of 102% of their list price. DeBord’s solution? He says home buyers must find ways to stand out from the crowd, which may mean having an approval letter from a reputable lender, maintaining availability and flexibility, or including a personalized home buyer’s offer. Extra touches that really do make all the difference and speak to our method here at RSIR as well."
Dean Jones contributed to the article, saying, “the real estate axiom overseas isn’t Location, Location, Location,” says Jones. “It’s Location, Education, Environment. The Seattle area has it all with the closest mainland port to China, renowned public and private schools and of course, fresh air and a culture of health and wellness, not to mention no state income taxes. The Chinese know that they can send their kids here for school with confidence that they’ll graduate with honors, secure a job in quick order and can still afford to buy a home and raise a family without restriction. That’s not all possible in China and increasingly more difficult in other West Coast markets where jobs and homes are just out of reach for many.”
Realogics Sotheby’s International Realty was featured in the March edition of the Alaska Airlines Magazine, thanks to the professional insight offered by Owner and President Dean Jones. He said, “Millenials are time sensitive and really prefer to walk to work,” and describes that we’re seeing condo-high rises in the city because they accommodate employees who’d prefer to live near their workplace but aren’t ready for a single-family home yet. A home the article says will likely be desired in the future and means the move may be, “just four blocks” away.
As Realogics Sotheby’s International Realty has experienced growth this year with the opening of our new Kirkland Showroom, Sotheby’s International Realty Affiliates LLC is also reporting continued growth. In 2013, its U.S.-affiliated brokers and sales professionals handled 24% more transaction sides compared to 2012, a number nearly 3 times higher than the National Association of Realtors.® reported 9.2% gain. Sales volume also rose to 29%, a full 10% higher than the overall market numbers, according to the National Association of Realtors.
Sotheby’s International Realty network only promises continued global growth in 2014, with the opening Beijing Sotheby’s International Realty, which Philip White, president and chief executive officer of Sotheby’s International Realty Affiliates LLC says, “is slated for the first quarter of 2014.”
In an article outlining the recent increase in residential construction just north of Downtown Seattle in communities such as northern Belltown and the Seattle Center, Lindsay Cohen from KOMO TV turned to Realogics Sotheby’s International Realty’s Owner and President Dean Jones for insight.
“I think we’re seeing this neighborhood being targeted by developers because the CBD has become so expensive to develop and arriving later in this current development cycle suggests building within smaller building envelopes,” said Jones. “The zoning in this neighborhood surrounding Seattle Center is much lower so we’re talking about more boutique communities where the developer can get into the city, get vertical quickly and be out to market in some cases before other high-rise projects are completed, even if they are under construction today.”