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Real Estate Trends for Summer 2019

by Karlie Watts | Jun 20, 2019
Real Estate Trends for Summer 2019

The Northwest has been one of the hottest real estate markets in the nation. But it’s not immune to national trends. Steady mortgage rates and variable home prices will make some pockets of the Northwest competitive and others affordable. Examine spring real estate trends on your path to a new home, and consider how they will affect your search and potential purchase.

Mortgage loans are holding (for now)

According to government-sponsored Freddie Mac, mortgage rates are holding fairly steady with a slight dip the first week of May to 4.14 percent for a 30-year fixed-rate mortgage. This was due to slightly weaker inflation and labor economic data.

It’s estimated that mortgage rates will be about a quarter to a half a percentage point lower than the same time last year. Combined with continued low inflation, economic growth and increasing consumer confidence, there should be a solid foundation for home sales to improve this summer.

Courtesy of Freddie Mac
Courtesy of Freddie Mac


With purchase and finance activity above last year’s levels, some believe the continued economic growth and job gains will boost the housing market even further.

Above average home prices

Homes in Idaho experienced home-price growth of 11.4 percent year-over-year in 2018. In 2019, home prices in both Boise and Idaho Falls have been on the rise and are expected to continue. According to Zillow, Idaho Falls home values have gone up 14.3% over the past year and Zillow predicts they will rise 8.1 percent within the next year. These gains were roughly double the national average (7.2 percent) for that same period. The numbers for Boise were higher with a reported 18.1 percent increase in Boise home values over the previous 12 months. Some predict that prices in Boise may rise by nearly 10 percent over the next year.

In Washington, the housing market has cooled in comparison to other regions’ acceleration. If only it hadn’t been red hot the last 18 months! Median home prices are down year-over-year in Seattle, Eastside and North King county, but up in Southwest and Southwest King county. In Pierce County, the median home price was up nearly 5 percent over the past 12 months, to $357,900, due in part by buyers unable to compete in the more expensive King County. Meanwhile in Spokane, home sales declined more than 24 percent compared to March 2018, for the largest year-over-year decrease in five years, according to data from the Spokane Association of Realtors. In southwest Washington near the Oregon border, prices continued to rise at a rapid 7.6 percent from a year earlier.

In Oregon the median home value is $346,000, and home values have gone up 4.9 percent over the past year. The median price of homes currently listed in Oregon is $379,900 while the median price of homes that sold is $337,900. In addition, home prices in Portland have begun to cool in combination with a larger housing inventory, making for a much calmer market this summer.

Be ready to compromise

As a homebuyer starting your search, you’re optimistic that you’ll find a property to fit your needs perfectly. What you may find instead is a lot of competition in the price range you search within. Meaning the home that are left are either out of reach financially or in need of a lot of work. In expanding, major metropolitan areas this holds true, but it is also gaining traction in other markets in the Northwest.

This doesn't mean you should overextend yourself because it could become a serious issue if rates dramatically rise. A single percentage point difference on a mortgage rate may not seem that significant, but it can add more than $100 to the monthly loan payment on a median-priced home of $300,000 (assuming 20% down). That can translate into tens of thousands of dollars over the life of a 30-year loan. Instead of overextending your budget, you’ll likely need to adjust to the market and compromise. This means looking outside your top neighborhood, considering a condo over a craftsman, or reprioritizing your home’s must-haves amenities to those that are nice-to-have.

The above trends will help guide you toward your new home, but are by no means exhaustive. Be sure to talk with your lending expert about the factors that may influence your home purchase, and how to negate any future risk. Smart financial planning, patience and additional research in your local market will influence the best possible outcome for your new home.


 

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