February around Puget Sound is usually described as rainy, cloudy, windy - with a chance of snowpocalypse. This year though, we’ve been using “hot” to describe our region. Not so much meteorologically, but market-wise. Record population and job growth coupled with (insanely) low inventory, has created eye-raising activity on the (very few) listings we have .
Normally, December-January marks the slowest months of the real estate year. 2019 showed a lot of uncertainty in the market: we had trade wars, an upcoming election, and the hint of market instability. Between holidays and cooler temps, most buyers (and sellers) would normally be hibernating until the more active Spring market - but this year has gone VERY DIFFERENTLY.
By the end of December last year, activity actually increased. We had four straight months of price increases. January was one of the busiest we’ve seen in an 18 year career! Perhaps buyers finally internalized the lower interest rates? Certainly, the lack of inventory - especially in the more affordable ranges - has driven demand and prices higher. Experts are even predicting a return to the frenetic markets at the height of the 2017 housing boom.
To give you an idea of how tight the market is: (as of 2/14/2020) there are currently only SIX single family homes (non land-value) available in the City of Bellevue below $1,000,000. That’s only six homes under $1,000,000 available for a city closing in on 150,000* residents. Across the Eastside (Woodinville, Issaquah, Redmond, Sammamish, and Bothell-King County) combined have 59 active homes under $1,000,000.
The NWMLS just released their statistics for the month of January and this stood out in their statement:
At the end of January, the MLS database totaled only 7,791 active listings of single family homes and condos, well-below the year-ago figure of 11,687 (down 33.3%). [...] In fact, for the 15 year span from 2005-2019 (180 months), inventory has dipped below 10,000 listings during only eight of those months.
Factors that might be contributing to this
- It’s trite but true: Seattle and Bellevue are experiencing an astonishing growth in the tech sector. Jobs, commercial space, and investment in infrastructure just keep going!
- Low Mortage Rates. In the fall of 2018 mortgage rates hit 5.25%. Today, some buyers are locking in at 3.50% significantly increasing their purchasing power.·
- 15,000. The number of jobs that Amazon has publicly stated as their target for downtown Bellevue in the coming years, up from 1,300 recently.
- 9 million. The amount of square feet that Microsoft, Amazon, Facebook, and Google have under construction in Bellevue, Kirkland, and Redmond.
- 45,000. The estimated number of technology jobs the Eastside will add in the next 5 years.
- Again, only 7,791 active single family homes and condos locally. A modern all-time low for active listings.
- Fewer homes being built. During this cycle (2012-2019) the City of Sammamish has averaged around 215 new construction sales a year. Currently there are 26 actives after building moratoriums have significantly decreased construction activity and now, supply.
What does that look like for a buyer? Opportunities are still out there - you can find a 2 bed $289,900 condo in Kirkland, or a home that is a bit further out. We’ve seen 32 price reductions this week on the Eastside alone. Don’t let the idea of competition deter you - qualified buyers are winning homes every day.
You only have to look at I-405 during rush hour to see the changes and growth of our region for yourself. Even as our communities grow, and inventory remains tight, our team continues to help our clients buy and sell. No matter what the market feels like, or the scary data points in the news, we’ll give you our honest advice for positioning yourself for success.
That being said, if you’re thinking about selling this year - or next - NOW is a great time to get the ball rolling and take advantage of the lack of competition. Let’s talk!