Snohomish County Real Estate Market Report for April 2023
SNOHOMISH COUNTY HOUSING MARKET AT A GLANCE
TABLE OF CONTENTS
3 KEY INDICATORS
SNOHOMISH COUNTY HOUSING MARKET
- SALES ACTIVITY INTENSITY:
- 75% (EXTREME FRENZY)
- INTEREST RATE:
- 6.44% (ACCEPTABLE)
- INVENTORY LEVEL:
- .7 Month (SEVERE SHORTAGE)
THE BIG DEALThe combination of an above average buyer's pool and a below average seller's pool has created an inventory shortage and the Average Sales Price jumped from $681K to $720K.
This article will be about the current and future state of the Snohomish County area housing market. Refer to the table of contents to skip to your interest.
We started with the Snohomish County housing market at a glance and the 3 key indicators, then the Snohomish County market video discussing the 3 key indicators and how they affect the market.
We deep dive into what story the statistics are telling us. We will hear from the 29th most influential person in real estate, Lennox Scott and what he sees happing in the real estate market. We look at Sales Activity, Market Intensity, Price, Interest Rates, Timing and Job and Population Growth. A complete list of the MLS Infospark stats for Snohomish County housing market trends.
Lastly, don't forget to check out the newest Snohomish County homes for sale.
March showed signs of a resilient housing economy. Although fewer new resale listings are coming on the market monthly than in previous years, the market is following a typical seasonal pattern.
We begin to see an increase in monthly new listings coming on the market starting in the spring, pre-summer, and summer months before simmering down in the fall and again over the winter. The more affordable and mid-price+ ranges show strong price support due to the Sales Activity Intensity™ for new resale listings and shortage of unsold properties.
Remember, it’s okay to buy and sell within the same market timing at today’s market price.
We continue to stay on a similar trajectory as we were on in 2018 where after an extended period with extremely low inventory and low interest rates, the interest rates increased and the sales intensity decreased.
In 2018 this was most noticeable starting in June and going through the winter as activity started to pick up in March. We would then go on to set sales records for the next 2-3 years.
In February of 2018 we got 1,102 new listings and February 2023 we got 758 new listings. In March of 2018 we shot up to 1,606 new listings. March 2023 we shot up to 1,092 new listings.
"Calmer inflation means lower mortgage rates, eventually. The 5% consumer price inflation in March is a steady improvement from 9% last summer, 8% in autumn, 7% during Christmas, and 6% in the early months of this year. The ideal inflation of 2% is still maybe a year away, but this directional improvement is a clear signal to the Fed to change its tightening monetary policy, especially considering that many regional banks are still on the edge of further interest rate risk blowup." (NAR)
Until we get a influx of listings or the interest rates become unmanageable... We do not have enough houses to sell. We are currently showing 1.2 months supply of inventory in Seattle and that is a Shortage on the verge of an extreme shortage.
We are seeing bidding wars on listings that are Market Ready. No where near as bad as the last few years. Because of this the average sales price for a Seattle home jumped.
- Sellers need to be Market Ready Day One to take advantage of the low supply and ensure their homes sell swiftly and for top dollar.
- Buyers need to readjust to the new normal and get themselves Buyer Ready Day One. Not every listing is a multi-bid scenario but we need to be ready when they are.
It is always OK to buy/sell within same market timing. In this market most sellers are sitting on big equity and can take their time to get their home ready for sale. After we sell we have a much higher chance of buying our move up or move down without having to arrange for temporary housing.
The dooms day stories about a potential crash continue to circulate and there is no doubt that we have seen a severe dip in the economy. I have found that the best way to really understand how the real estate market is responding is to look at the data and match it up with the eye test.
We tend to look heaviest at the 3 key indicators to determine the health of the market.
The percentage of new listings that go pending, or under contract, in the first 3o days. We call this the "Sales Intensity Scale". During the pandemic we literally had to make up a new adjective to label what was happening as we were seeing over 90% of new listings go pending in the first 30 days. We called that an Ultra and Uber Frenzy Market. We are currently sitting at 75% of new listings. We call that a EXTREME FRENZY Market. A median or average type market would be around 30%.
Inventory levels continue to decrease and are at what we consider a Severe Shortage Inventory Level. This last year we hit all time record lows for the amount of homes for sale. When there are not many homes to buy and many people looking to buy homes that is simple Supply and Demand. Not enough supply for all that demand.
Interest rates play a huge role in the demand. If people can not get financing, or financing that match their needs, that will limit the demand. Right now interest rates are under 7%. Data shows that we will tolerate interest rates under 7% and continue buying homes.
BONUS TIP: With some listings it is possible to negotiate for Seller's concessions. Look for homes that have been on the market longer than 7-10 days. Generally these concessions would go towards your closing costs. Now might be a good time to negotiate seller concessions towards buying down your interest rate. Either a permanent or temporary 2/1 buydown.
With .7 months of supply we are again seeing some bidding wars, waiving of contingencies and ultra quick sales.
If you are thinking of buying a home in Seattle right now and are worried that the interest rates have increased it is important to contrast that to what you gain.
Many experts are predicting that we should start to see rates drop again in the 2nd half of the year.
"Marry the house (while they are easier to get) and date the rate until they come back down to the 4's".
We should stay in a Surging to Frenzy market meaning that 55 - 75% of homes sell in the first 30 days through the summer.
Seattle rent remains high and according to Zillow, "Rent growth should remain strong in the short term as high home prices keep many would-be first-time buyers in the rental market. Over the next 12 months, rents are expected to grow more than inflation, stocks and home values."
According to Rent.com Snohomish County's average 2 bedroom rent for an apartment is $2,100 month. Which equates to approximately a $400,000 home (view Snohomish County homes for sale in the $400K - 600K price range) with 20% down on a 30 year fixed 6.44% bought down to 4.44% with a temporary 2-1 buydown interest rate loan.
As we find ourselves in recession-like situations the best hedge for inflation is real estate.
Seattle has the 2nd highest percentage of tech workers in the country. "Seattle Overtakes Boston as Third-Richest US City by Household Income" (Bloomberg)
Despite WA being fully open we will continue to offer a full suite of Virtual Real Estate Services.
ORIGINALLY POSTED HERE: https://www.themadronagroup.com/snohomish-county-housing-market/