Seattle Update: Market Slowdown?
SEATTLE MARKET UPDATE
Overall prices rose to more than 9% from the 2016 stats. However some counties, including King County, saw a median price increase jump to 18.6%. Like previously documented throughout the year, Seattle has faced inventory shortages due to high demand. King county inventory is down with homes selling in about a week on average.
If you think buying a condo will get you further, know that the condominium inventory is low however the median cost has only increased by 5.7%, one of the slowest growths in the past two years.
BROADER PERSPECTIVE ON THE REAL ESTATE MARKET
Is There a Market Slowdown Coming?
By Steve Murray
In virtually every market in the country, inventory levels are at record lows, absorption rates are at all-time highs, and prices have risen far faster than the rate of increase in household incomes.
In the past, housing sales dipped due to slower economic growth or rising interest rates. Now, it’s due to the lack of inventory and the decline of affordability for many households to afford the soaring cost of new and existing homes.
One good example is in San Francisco where homes are measurably down, in fact, sales have been down for more than just the last year, and prices are softening.
This downturn is more of a pause than a typical slump in housing sales. Prices have outrun incomes.
The absence of a downturn in the overall economy and the presence of a persistent strong demand for housing, indicates that while the downturn in unit sales could last for some time, it won’t be anywhere near as severe as the last downturn.
One last indicator that we observe is the percentages of all households that are buying homes in each year. Studies we produced for clients suggest that the normal percentage of all households that purchase a home in each year is approximately 4.6 percent. That is very near where we are today. We believe this is a good indicator that we are at a normal level of housing sales now—anything above that signals overheating.
Read the Full Article on Real Trends!
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