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Puget Sound Real Estate: Steady as She Goes

Empirically we’ve been seeing this trend for a few years, but now the data squarely shows what many of us in the industry have been feeling all along:  after years of strong appreciation, more and more buyers are moving their house hunt out of the higher-priced King and Snohomish Counties, and into the more affordably priced surrounding counties (Skagit, Pierce, Thurston, Island, and Kitsap).  This has resulted in stable housing prices in King and Snohomish Counties, but rapidly appreciating home prices in the other five.  The graph below doesn’t show Thurston, Skagit, or Island County, but check this out for median home prices:

  • King County year over year:  + .15% appreciation (negligible difference)
  • Snohomish County year over year:  – .45% appreciation (negligible difference)
  • Pierce County year over year:  + 6.25% appreciation
  • Kitsap County year over year:  + 14.86% appreciation (Thank you Fast Foot Ferry for helping make this possible!)
  • Thurston County year over year:  + 9.84% appreciation
  • Skagit County year over year:  + 5.72% appreciation
  • Island County year over year:  + 9.39% appreciation

This is all well and great, but let’s be real here:  If someone works in Seattle or Bellevue, one can only commute so far, right?  Yes, and the fascinating part about that is if we take a look at the King and Snohomish submarkets, even though the counties as a whole are basically flat-lined, the buyers within the county have pushed into the surrounding submarkets driving up prices there as well…Better late than never, right Seward Park, Skyway, Renton, Kent, Auburn, and Maple Valley?!

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Summary

Though the headline might not read “Puget Sound is the Nationwide Number One Housing Market AGAIN,” don’t be fooled, there are still many hot pockets around Puget Sound with rapidly appreciating housing prices.  Think of this time in the Puget Sound housing market as nothing more than a balancing of prices across the board. Prices shot sky high in certain submarkets between 2012 and early 2018, but they can only go so much higher than the home prices in all other surrounding submarkets.  There’s no bubble.  No crash.  Right now prices are simply balancing out.

Alex Black Absorption Rates per NWMLS Real-Time Data
Absorption Rate is calculated as:  (Pending Sales) / (Active + Pending Sales)

SFR in Seattle

  • SFR Pending Sales in Seattle:  638
  • SFR Active Listings in Seattle:  1,436 homes
  • Absorption Rate for SFR in Seattle:  30.76%
    • Buyer activity matched seller activity this past week = stable median SFR prices likely

Condos in Seattle

  • Condo Pending Sales in Seattle:  233
  • Condo Active Listings in Seattle:  708
  • Absorption Rate for Condos in Seattle:  24.76%
    • Buyer activity decreased slightly in relation to seller activity this past week = slightly decreasing median condo prices possible

Interest Rates

Per Bankrate.com, the 30-year mortgage interest rate “Surged” to 3.97%, with .31 in discount and origination points. According to Bankrate, rates have fallen 1.13% since their 52-week high of 5.1% (That’s a savings of $336.31 per month on a $500,000 loan!)

 Mortgage rates this week

The benchmark 30-year fixed-rate mortgage surged this week to 3.97 percent from 3.87 percent a week ago, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.88 percent and four weeks ago, the rate was 3.85 percent.

As the 30-year fixed rate inches closer to 4 percent, some homebuyers might worry that their window of affordability for a new mortgage is shrinking. But it’s important to remember that rates are still relatively low when taking a longer view, says Greg McBride, CFA, Bankrate’s chief financial analyst.

“Mortgage rates have reversed course in the past couple of weeks due to a more optimistic outlook on trade developments and the overall economy. But fear not, this just takes us back to where we were on July 31,” McBride says.

While refinance activity is likely to wane on higher rates, homebuyers shouldn’t be surprised to see more fluctuations in interest rates in the weeks or months to come, McBride adds.

“Mortgage rates are still a full percentage point below where they were just 10 months ago,” he says. “The trade situation is certainly fluid, so don’t rule out another drop in mortgage rates if talks collapse or the rhetoric gets ramped up.”

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The 30-year fixed-rate average for this week is 1.13 percentage points below the 52-week high of 5.10 percent, and is 0.23 percentage points higher 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 4.42 percent. This week’s rate is 0.45 percentage points lower than the 52-week average.

  • The 15-year fixed-rate mortgage rose to 3.31 percent from 3.22 percent.
  • The 5/1 adjustable-rate mortgage rose to 3.82 percent from 3.71 percent.
  • The 30-year fixed-rate jumbo mortgage rose to 3.83 percent from 3.81 percent.
  • At the current 30-year fixed rate, you’ll pay $475.69 each month for every $100,000 you borrow, up from $469.95 last week.
  • At the current 15-year fixed rate, you’ll pay $705.59 each month for every $100,000 you borrow, up from $701.21 last week.
  • At the current 5/1 ARM rate, you’ll pay $467.10 each month for every $100,000 you borrow, up from $460.85 last week.

Results of Bankrate.com’s weekly national survey of large lenders conducted September 18, 2019 and the effect on monthly payments for a $165,000 loan:

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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 – Updated 9.17.19

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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 

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