King County's median single-family home price hit $300,000 for the first time, according to the Puget Sound Multiple Listing Service, which monitors local market activity. In September, the median price for King County condos, which now account for almost a quarter of all housing sales, came in just shy of $200,000. (Median means half the properties sold for more, half sold for less.)
• In Snohomish County, summer prices reached a median $240,000 for single-family houses, up $30,000 in less than two years. Condos, which are a far smaller percent of the market in both Snohomish and Pierce counties, bounced around in the $160,000 range for much of the year.
• In Pierce County, the top median price for single-family houses was $183,000, or $24,000 more than at the end of 2001. Condo median prices were in the range of $130,000 to $150,000 or so.
None of this robust sales news makes the Puget Sound region unique; in fact, our market is a reflection of a national trend.
According to the National Association of Realtors, this year's sales of existing homes are expected to be up 9 percent over last year's record totals. Nationally, median home prices are expected to increase 9 percent, to $172,000.
Market sours despite economy
The wonder here is that all of this has been happening while the rest of the nation rebounds from a recession, but Washington still struggles. State and local unemployment rates have been consistently higher than the national average, and Boeing, which traditionally leads this region out of recessions, has been in the doldrums. (The jury is still out on whether aerospace jobs will increase following this month's announcement that Boeing will build its new 7E7 jet in Everett.)
Still, as Riss points out, "we might have high unemployment of 6 or 7 percent, but that means that 93 percent are still working and buying things. And real estate as an investment is still out-performing everything else."
That's another reason Riss uses the word "competitive" to describe this year's market. "For buyers of more moderately priced housing, it was tough to find a house to suit their needs because of the lack of supply coupled with the number of other buyers."
Sales of million-dollar homes also broke records, Scott says. However, that was offset by the record number of luxury homes for sale. As a result, the high-end market saw little, if any, appreciation.
Because of falling interest rates, this year's buyers were competing for lenders' time with a virtual tsunami of mortgage refinances as homeowners chased ever-better deals. So the story behind the story, says Scott, is the "technology innovations that helped allow for this record market."
Technology played key role
Foremost is sophisticated technology that's greatly speeded up mortgage processing. Without it, the crush of business "would have brought the market to its knees," Scott says.
Additionally, as many as 70 percent of buyers preshop for homes on the Internet before they contact an agent, estimates Prudential's Smith.
That figure certainly wouldn't surprise Scott. He says property listings on his firm's Web site (www.johnlscott.com) get 5 million hits a month. All this means customers come in knowledgeable and ready to do business.
In the coming year, "everything is in alignment for a strong market," Scott predicts. Indeed, the unemployment rate is falling, the stock market is rising, inflation is steady and both consumer confidence and home building are up.
In a presidential election year, interest rates are projected to average 6.4 percent, according to the National Association of Realtors.
"It's going to be a good time to buy a house next year," counsels Bruce W. Williams, chairman and CEO of HomeStreet Bank.
Even if rates do climb into the mid-sixes, "rates are still really good," he says, pointing out that until they dipped even lower this year, 6 percent would have been a headline-grabber.
Be attentive to rate moves
Still, Williams counsels that it's impossible to know with any certainty exactly how mortgage rates will act. So prudent homeowners and prospective buyers will need to be watchful.
Here's the pros' advice:
• Homeowners who have adjustable-rate mortgages should monitor interest rates carefully, Williams says. Rising rates mean rising mortgage payments, unless they switch to a fixed-rate loan.
• He also suggests those considering refinancing or buying investigate the stability of lenders carefully. If rates rise suddenly, some lenders may be forced out of business.
• Scott anticipates another "quick-action market," meaning that well-priced properties will be snapped up quickly. "Buyers need to get preapproved for a mortgage and look at their credit," he says, to make sure it's good enough to get a favorable interest rate.
• Additionally, avoid making big purchases, like a car, or running up big credit-card debts if your goal is to purchase a house, Scott advises. That's because lenders consider your total debt load in deciding whether to give you a mortgage.
• Even before they sell their current home, move-up buyers should get a good idea of how much equity they'll have for a down payment on their next home. "It makes a stronger offer on the next home," Scott points out.
• Sellers need to price their home competitively, which means shopping the competition. If the value is not there or the seller is unrealistic, buyers will walk away, Smith says.
• Finally, don't wait for an imagined "real-estate bubble" to burst, Riss cautions. "We don't have one, and we're not going to have one, because we continue to have a limited supply of housing."
And the lack of buildable land, particularly in King County, means "there's nowhere else for people to go. It's going to drive up resale prices," Riss concludes. |
