Washington State has seen positive gains in the 2015 Housing Market. Home sale prices, number of sales, and new building permits were all higher than 2014. The second quarter of this year saw a 9.5% increase in statewide median sale prices for single-family homes compared to the same time last year. This is still lower than the all time high in 2007 but shows that the Washington housing market is healthy. Home sales are increasing the most in the state’s 17 metropolitan counties, with the highest increases coming in Wahkiakum County (34.6%) and Skamania County (32.4%). Only 2 counties reported a decrease in median prices. But as metropolitan areas become more coveted buyers are beginning to move to the outlying markets. “Multiple offers are now being seen in outlying areas as buyers look farther out just to find a home that is a perfect fit while sacrificing distance to work and services,” says MLS director George Moorhead. “And good schools remain the highest sought-after criteria.” The downfall in all of this is that housing affordability for all buyers statewide has decreased.
Using an index where 100 means that the average income family qualifies for a median priced home (with 20% down and a 30 year fixed mortgage rate), this year the number fell from 152 to 143.1. And across the state the first-time buyer index shows a decrease of 4.9 points. Of course housing affordability varies across the state. The least affordable county is San Juan, while the most affordable is Lincoln County. In fact all of the counties east of the Cascade mountain range (which includes Lincoln County) remain highly affordable with the exception of Kittitas County. Along with San Juan, all coastal counties west of the Cascade mountain range present issues for first time homebuyers, especially in the central Puget Sound area. Puget Sound is home to both the Seattle and the Olympia WA real estate market. According to Trulia Seattle and Olympia both have extremely high selling prices for 2015.
All of the affordability issues come despite the fact that there is strong permit activity of over 7,500 new units. This activity is primarily in the multifamily housing developments in metropolitan areas. This is a 3.8 % increase from last year. So as real estate agents try to formulate housing market predictions for 2016 they need only to refer to current numbers. Normally the holiday season is a slowdown for the housing market as shoppers are preoccupied with other expenses, but not this year. “This year is different,” say Washington real estate experts. “Today we have one of the best markets we’ve ever seen for sellers,” says managing broker and Coldwell Banker Evergreen owner Ken Anderson. “Buyers are still surging to the market and inventory is low. It’s a very good time to sell. Owners who are eager to make the next move don’t have to wait six months or until spring to act.”
Recently released MLS numbers support Anderson’s claims. Sales for October show that pending sales are up 7.8% from October of last year. And even the aforementioned Puget Sound area with its lack of affordability is seeing a surge in sales. King, Kitsap, Pierce, and Snohomish counties had the highest October volume in a decade. The lack of inventory is starting to become an issue. Nineteen of the twenty-three counties in the state report a higher number of pending sales than the number of new listings. And nearly half of the counties have seen double-digit gains in mutually accepted offers. Inventory at the end of October stood at 18,068 listings. This is far below the total of 23,501 for October of 2014, representing a 23.1% drop. So the end of 2015 is seeing a slight drop in home sales but this actually represents a healthy market. “Given the shortage of homes for sale, I’m not surprised to see that both pending and closed sales slowed down last month,” says O.B. Jacobi, president of Windermere Real Estate. And fellow realtor Mike Gain agrees. “If we had more homes to sell the number of closed units would have increased even more during October.” So those looking to sell a home in the state should be prepared for quick and competing offers. For all buyers looking to invest in the Washington housing market they must prepare themselves for a possible uphill battle to land that dream home. “Selling more homes at a faster rate than we are replenishing supply shows just how good the local real estate market really is.”
Influencing Factors for the 2015 Washington Housing Market
- Low interest rates and the excellent job growth in the state will likely increase demand as spring approaches.
- The depleted inventory of for-sale homes has had an expected impact on the rental market. On various listing sites such as Apartments.com and Craigslist Washington has some of the highest rental prices in the country. On real estate website Zillow Seattle WA has an average rent list price of $2,396, far above the national average of $1,382.
- Home Values in the state average $280,800. This number is expected to increase 5% in the upcoming year.
- Homes spend an average of 65 days on the market in Washington.
Best Places to Live in Washington
As stated earlier the Puget Sound region is the most sought after and most expensive in the state. Most notable is the Seattle WA real estate market in King County. Realtors have seen their open houses in the city providing immediate results. “New listings get picked through pretty quickly, and homes that are correctly priced are selling within days, with multiple offers,” says real estate branch managing director Frank Wilson. According to Trulia Seattle has seen 8,000 recently sold homes. But this doesn’t mean that there aren’t deals to be had. Homes that are listed for more than 60 days are most likely inflated in hopes of raking in the most money. “Some sellers are tending to overprice their homes due to all the hype.” This means for homes on the market for more than 2 months there may be room for negotiation. Seattle’s home price gains have earned the city the number 1 ranking on a recently released list of the hottest single-family housing markets in the country. Experts credit strong demand, increasing prices, low interest rates, and the regions healthy economic conditions.
Joining Seattle in King County is the Bellevue WA real estate market. Nestled between Lakes Washington and Sammamish, Bellevue is just as coveted if not more than the Seattle market. Home values in the city have seen a 10% increase in the past year and predictions have this increasing another 5.9% in 2016. And although there is a high home value median Bellevue has an incredibly low foreclosure rate of 1.3 per 10,000. This is nearly one-third the foreclosure rate of Seattle. Bellevue boasts healthy economic conditions and a great schooling system.
Rounding out the Puget Sound region is the Tacoma WA real estate market in Pierce County. Those that can’t get into the Bellevue and Seattle markets might have better luck in Tacoma. Referred to as South Sound, Tacoma has actually seen the total number of single-family homes for sale rise since the summer. This is in spite of a 7.7% increase in prices. With all of the economic benefits of its Puget Sound neighbors Tacoma is a market worth exploring if one is willing to venture south a short way.
And if Puget Sound is too expensive, just west of the Cascades is the Vancouver WA real estate market in Clark County. With a home value index of $237,900, it is less than half that of Seattle’s home values. Located on the Columbia River Vancouver enjoys all of the amenities and benefits of Portland, Oregon, due to its close proximity. Named one of the best places to live by Money magazine, Vancouver has dedicated itself to revitalizing its metro area for the past fifteen years and the city is starting to see the affects of that commitment. Vancouver’s modern facelift can be seen in the city’s new condominiums, offices, library, and retail spaces.
With all of the attention focused on the western half of the state the more affordable regions east of the Cascade Mountain range can easily be overlooked. Lincoln County is the most affordable market in the state, but coming close is the Spokane WA real estate market. Located on the Spokane River and just 20 miles from the Canadian border the city is a hidden gem for those unfamiliar with the region. Recently, Spokane has started economic development focusing on manufacturing, health sciences, professional services, information and technology, finance, and clean technology. As a result the local job market has been one of the best in the state. The city’s landscape ranges from Victorian style to contemporary, truly catering to any housing preference. And with a home value index of $147,900, Spokane is one of the best-valued housing markets in the state.