Welcome to the FIRST Weekly Market Update of the year! Taking a look at the Puget Sound real estate market, it looks like things may be tightening up.
Here are some quick real estate points of the Week:
- Inventory in the city continued its decline -Down 43.03% since its November 2nd high of 1,355 homes for sale.
- Price per square foot in the city has risen 5.56% – From $378 on 11/9/18 to $399 this past week
- Seattle median price is up to $745,000 from the $729,000 seen on 11/16/18 (+2.19%)
- Per Bankrate.com, interest rates are .42% lower than they were 2 months ago. On a $500,000 mortgage, this translates into $127.57 savings per month; or $1,530.84 per year. This interest rate reduction adds just over $24,000 to someone’s purchasing power from two months ago.
- Remember, per the 2017 Census data, 116 people per day are moving to the Greater Seattle Metropolitan Area from outside the region. That’s 42,340 new residents per year or 3,528 people per month. This doesn’t even account for the 22,000 natural population gain (births less deaths of current residents)
What does this mean?
Something happened in 2018 that threw the Seattle housing market for a loop. We actually know exactly what happened: Buyers didn’t buy. However, the reasoning behind that is anyone’s guess. Maybe it was higher interest rates (which are now falling). Maybe it was fear of an Amazon HQ2 exodus (which is not happening – They have 9,348 full-time job postings in Seattle per Indeed.com). Perhaps it was increased apartment supply causing rents to flatline. It could have been the fear of buying into a declining market. Or it may also just have been the years of buyer fatigue taking it course and people deciding to hang out for a bit. Whatever it was, buyers weren’t buying as fast in 2018 as they were in previous years. This caused inventory to rise, and prices to take a couple steps back.
Looking into the future, there should (theoretically) be a backlog of potential homebuyers. The market is heading into 2019 with inventory falling. This hits the proverbial reset button on the Puget Sound real estate market.
Next week will be a big week as the local media pushes out the December NWMLS reports. The data shows a tighter market than in recent months. So, if the public perceives this as the buyer winder closing, prices may get driven higher. If buyers remain on the sidelines, then things will likely remain constant for another month or two as sellers don’t normally come to play until around March. In the end, the market will be dictated on how buyers react to the market slowly tightening up.
Interest Rate Update
Per Bankrate.com, the 30 Year Mortgage interest rate fell to 4.68%, with .31 in discount and origination points.
Rates have fallen .42% in the last two months.
Rates are .5% higher than the 52 week low interest rate of 4.18%
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage fell this week to 4.68 percent from 4.75 percent, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.10 percent. Four weeks ago, the rate was 4.90 percent. The 30-year fixed-rate average for this week is 0.42 percentage points below the 52-week high of 5.10 percent, and is 0.50 percentage points higher than the 52-week low of 4.18 percent.
The 30-year fixed mortgages in this week’s survey had an average total of 0.31 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.71 percent. This week’s rate is 0.03 percentage points lower than the 52-week average.
- The 15-year fixed-rate mortgage fell to 4.11 percent from 4.13 percent.
- The 5/1 adjustable-rate mortgage fell to 4.26 percent from 4.31 percent.
- The 30-year fixed-rate jumbo mortgage fell to 4.55 percent from 4.63 percent.
- At the current 30-year fixed rate, you’ll pay $517.44 each month for every $100,000 you borrow, down from $521.65 last week.
- At the current 15-year fixed rate, you’ll pay $745.21 each month for every $100,000 you borrow, down from $746.22 last week.
- At the current 5/1 ARM rate, you’ll pay $492.53 each month for every $100,000 you borrow, down from $495.46 last week.
Bankrate.com’s weekly national survey
Results of Bankrate.com’s weekly national survey of large lenders conducted January 2, 2019 and the effect on monthly payments for a $165,000 loan:
The “Bankrate.com National Average,” or “national survey of large lenders,” is conducted weekly. The results of this survey are quoted in our weekly articles and national media outlets. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. https://www.bankrate.com/mortgages/analysis/
City of Seattle Stats for Single Family Residences – 1.4.19
These charts are Seattle Specific, but the Puget Sound Real Estate Market mirrors the Seattle market.
Scott Sheridan is a Loan Officer with Primary Residential Mortgage, Inc. Being in the mortgage industry for three years, Scott brings a fresh millennial flair to the industry. He is well-versed in the most modern, efficient, and convenient ways to get things done. Scott combines these skills with a genuine love of his work and recent experience in what is it like to be a first and second-time home buyer. You can follow Scott’s weekly market updates on his PRMI Facebook Page.