Is the Puget Sound housing market currently at its bottom? Or do people think prices will fall further? Some things to consider for purposes of evaluation:

Seattle home prices have fallen 7.98% since hitting its all-time high on May 4^th, 2018 of an $815,000 median price (Altos Research).
This happened despite:
1. Interest rates falling over a percentage point in the last year, which translates to increased affordability
2. Home prices in Seattle still relatively more affordable at 47.24% lower than those in San Francisco, and 28.02% lower than those in San Jose (and, we don’t have a state income tax to account for like those cities do, thus driving affordability in Seattle even higher when compared to those comparable cities)
3. Amazon growing (Amazon now has 53,500 employees in the Seattle Metro area, surpassing Microsoft’s 51,854 regional employee base). BTW – GeekWire tells us the average software engineer in Puget Sound is hauling in $138,000 per year.
4. Incomes growing (The latest Census data shows Seattle area incomes have risen 55.32% since 2010, or $33,300 to a median area income of $93,500, not adjusting for inflation)
5. Google, Apple, Facebook, and Salesforce have all announced major expansion plans in the Puget Sound Region in the past 18(ish) months
6. Microsoft has become,if not the most valuable corporation in the world, it’s close to it at a $1.061 trillion valuation (PS. Amazon is third on the list at $857.8 billion,just behind Apple, but ahead of Google) Hello, stock-option income!

Outside of the macro-economic headlines (trade wars, recession, etc), the biggest local detractor I can think of to our region’s continued success would be Boeing’s 737 MAX woes. But even then I have to believe they’ll right the ship and pull out of this. They’re simply too big and smart not to. Right?

Summary

So I’ll ask the question again: Is THIS the Bottom? Housing prices are off their all-time record highs, yet the local economy continues to grow (strongly), and affordability is still there (relatively speaking). I almost get the sense the Puget Sound Housing Market is spinning its wheels and kicking up dust. But eventually, the table is set for those wheels to catch traction and take off. Think of Wiley Coyote as he’s beginning his proverbial chase of the Roadrunner (beep beep). Are Boeing and Recession concerns keeping the market in place right now? What happens when those concerns dissipate? Or do we think those concerns will grow bigger, and that the bottom is still yet to come? What do you think?

Alex Black Absorption Rates for the Puget Sound Housing Market
Absorption Rate is calculated as: (Pending Sales) / (Active + Pending Sales)

SFR in Seattle

SFR Pending Sales in Seattle: 657
SFR Active Listings in Seattle: 1,411 homes
Absorption Rate for SFR in Seattle: 31.77%
- Buyer activity matched seller activity this past week = stable median SFR prices likely

Condos in Seattle

Condo Pending Sales in Seattle: 213
Condo Active Listings in Seattle: 702
Absorption Rate for Condos in Seattle: 23.28%
- Buyer activity decreased slightly in relation to seller activity this past week = slightly decreasing median condo prices possible

Interest Rates

Per Bankrate.com’s survey of large lenders, the 30 year mortgage interest rate fell to 3.91%, with .31 in discount and origination points. According to Bankrate, rates have fallen 1.19% since their 52 week high of 5.1% (That’s a savings of $353.54 per month on a $500,000 loan!)

Mortgage Rates

The benchmark 30-year fixed-rate mortgage fell this week to 3.91 percent from 3.97 percent last week, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.92 percent. Four weeks ago, the rate was 3.79 percent.

Rate whiplash might feel fatiguing and make it hard for prospective homebuyers to time their home purchase. Even with recent rate fluctuations, though, it’s important to note that rates are still below 4 percent. Another encouraging sign: the rate of home-price growth continues to slow in parts of the country, according to recent data from the S&P CoreLogic Case-Shiller Indices.

The 30-year fixed-rate average for this week is 1.19 percentage points below the 52-week high of 5.10 percent, and is 0.17 percentage points greater than the 52-week low of 3.74 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 4.40 percent. This week’s rate is 0.49 percentage points lower than the 52-week average.

The 15-year fixed-rate mortgage fell to 3.28 percent from 3.31 percent.
The 5/1 adjustable-rate mortgage fell to 3.70 percent from 3.82 percent.
The 30-year fixed-rate jumbo mortgage fell to 3.77 percent from 3.83 percent.
At the current 30-year fixed rate, you’ll pay $472.24 each month for every $100,000 you borrow, down from $475.69 last week.
At the current 15-year fixed rate, you’ll pay $704.13 each month for every $100,000 you borrow, down from $705.59 last week.
At the current 5/1 ARM rate, you’ll pay $460.28 each month for every $100,000 you borrow, down from $467.10 last week.

Results of Bankrate’s weekly national survey of large lenders conducted September 25, 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/

These charts are Seattle Specific, but the Puget Sound Housing Market mirrors the Seattle market.

Scott Sheridan is a Loan Officer with Primary Residential Mortgage, Inc. Being in the mortgage industry for four 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