I recently attended two highly informative events where Windermere’s Chief Economist, Matthew Gardner, covered the economic and housing outlook for our region. Mr. Gardner shared that the economic landscape for the greater Seattle area is quite good. Our unemployment and rate of inflation are both low. He stated that we need to see more diversification in the job offerings in our region – we’re a bit too reliant on Amazon, which is the leading company creating jobs and our need for more housing inventory. Wage discrepancy and the level of part time employees searching for full time work is also an issue. Add in the current home pricing in King County plus the rapid rise of rents, and there is a segment of Seattle Metro buyers who are priced out the market and are looking in other counties for housing. The Tacoma area is increasingly where buyers are choosing to make home purchases. Home pricing and local economics are also affecting the number of 1st time move-up buyers. They are opting to remain in place for now, which has definitely made an impact on the number of homes being listed for sale.
The flip side of the current price of homes is the positive equity being generated for today’s Seattle Metro homeowners. This positive equity should motivate more sellers to enter the housing market, and give us the desperately needed housing inventory our market needs. Fixed rate mortgages will remain low during 2016, although there is a misconception among 1st time home buyers that a 4% 30 year fixed mortgage rate is too high. Think back to 1982 when buyers faced an 18% mortgage rate! 4% is a dream in comparison.
Supply in the high end real estate market is tight in our region and will remain so during 2016. Luxury real estate buyers are able to take advantage of fantastic jumbo loan options currently, as long as they can find the home of their dreams to purchase. There is definitely some good news in the horizon that may increase the inventory of luxury real estate in the greater Seattle area. It is projected more high end spec builders will experience improved access to financing options from lenders this year.
With 2016 being an election year, Mr. Gardner projected no large surprises in housing or economics looming. Typically, election years are fairly benign and 2016 promises to follow in a similar vein. If you have any questions on our regional housing market, or about your home’s current value, please give me a call at 206-412-0038 or send me an email at email@example.com so I can answer your questions.