Bottom line… Seattle real estate will remain a sellers’ market through 2018. In 2017, it saw the highest percentage home price increase in the United States. Zillow’s real estate predictions include a 6.2 percent increase by the end of 2018. (we are a little more bullish.) Mortgage rates have already inched up so, more than likely, they will continue to increase over the year. Combine this with rising prices and homebuyers purchasing between now and April or May will be saving in comparison to those buying later in the year.
Transit Will Be A Primary Factor in Higher Home Prices
Nationwide, the booming economy is the driving force for rising home prices, with the biggest surges happening in tech and finance hubs. That, of course, includes Seattle, whose housing inventory and transit infrastructure are woefully behind demand. The population topped 700,000 last year, and our region is still attracting thousands of new residents every month.
In Seattle, transit access will be the primary driver for home values this year. Any land, condo, or home near a transit hub will be a golden egg.
In the Size, Condition, or Location compromise scenario, we strongly suggest you go for Location as your top priority. Buy anything livable within a 2-mile radius of a transit hub. You will be guaranteed returned regardless of the market because of our infrastructure issues.
In Volatile Times, Expect Unexpected Moves for Sellers
The Dow Jones average exceeded 25,000 this month. Speculation about the if/when of a stock market correction is in full swing. Startups will be the first hit by a correction that ends speculative investment. We have started to feel some rumblings of startups losing funding, closing shop, etc. Our economy is robust enough to absorb most of these layoffs, but some folks will have to pack up and sell quickly to start a new chapter elsewhere.
To make things even weirder, Trump’s aggressive attacks on immigrants and foreign workers could mean current active visas being pulled without notice. This recently happened to one of our Diva Dwellers. Not everyone will weather the policies of the new administration and many folks may either be forced to move or choose to move in search of a less tenuous situation.
If you think this is a position you might be in sometime in the future, we suggest you have 10 percent of your potential sale price saved. Having this buffer of funds will come in handy in case you have to move unexpectedly and are unable to rent out your home.
We Will See A Higher Number of Estate/Family Home Sales on the Market
Many Seattleites are having to work through selling their family home. It is one of the most agonizing things for a family member to attempt on their own. This past year, our team was able to help several folks clean out their family homes and get them prepped for sale. These were some of our most rewarding experiences in 2017.
As baby boomers are getting older, we will see more of these types of homes come on the market. And no worries sellers, we at Tean Diva have a plan for you.
And as a buyer, get ready to get dirty and put in some sweat equity when you find these Seattle gems.
The 2017 Tax Bill Will Cool The Seattle Real Estate Market…in 2019
Many people will reevaluate their money situation in 2019 when they really feel the impact of the Republican Tax
Scam Bill. It will be especially hard for middle-class homeowners and buyers. For instance, the bill eliminates deductions for Mortgage Insurance over $500,000 and interest from big purchases like renovations or buying a cute Airstream to park on your plot of land on the Hood Canal. Home buyers and owners will be compelled to stay put longer if they want to take capital gains deductions, which require them to stay in the home 5 out of 8 years (up from 3 years).
The most immediate downward pressure on prices will be on the largest, most expensive luxury homes. Meanwhile, coastal states with high state and local taxes will be hit particularly hard. Among west coast states, California will be hit hardest by the loss of SALT deductions. This may drive even more Californians north to Seattle. (Californians make up a large percentage of transplants that have pushed our population over 700,000.)
We don’t think these changes will impact the 2018 market, but they will have a cooling effect on the market in 2019.
Average Prices in Core Seattle Will Top $1 Million by May 2018
Some may consider this the boldest of our real estate predictions.
The average price in Seattle for a single family home has hovered in and around $800K. Once the spring market gets going, I would not be surprised if the market pops up over $1M. This has been a long time coming in our market. We have the incomes, but too little inventory. Younger buyers with less equity are already looking to the suburbs, but those who can vie for the most central, coveted locations will push prices skyward.
It’s not a matter of if, but when, and we am guessing sooner than later.
What do you think? Share your thoughts with us on social media!