It looks like 2019 could be a great time to buy a home in Seattle. Home prices are slowing down. More inventory is coming onto the market. And mortgage rates are expected to remain fairly stable over the coming months. Those are just a few of the trends we are tracking, as we head into the winter of 2018.
1. There’s more inventory available today.
For the past few years, home buyers in the Seattle area have had to cope with a severe shortage of homes for sale. There just weren’t enough properties on the market to meet the demand from buyers. But that’s all changing, as we approach the end of 2018.
In 2019, Seattle home buyers will have access to more inventory. There are most active listings today than in previous years. There are several reasons for this. Sales activity has slowed over the past couple of years, so homes that come onto the market today aren’t being “snatched up” as quickly as in the past. This allows for an accumulation of inventory.
According to a 2019 housing forecast from Realtor.com (with highlights added):
“Next year, realtor.com® forecasts more high-end inventory growth in major metros with the largest increases expected in: San Jose-Sunnyvale-Santa Clara, Calif.; Seattle-Tacoma- Bellevue, Wash.; Worcester, Mass.-Conn.; Boston-Cambridge-Newton, Mass.-N.H.; and Nashville-Davidson– Murfreesboro–Franklin, Tenn. all of which could see double digit gains in inventory in 2019.”
In early fall 2018, Seattle had about a three-month supply of homes for sale. That was the highest level of inventory since 2012. And it could increase further as we move into 2019. That’s good news for home buyers.
2. Mortgage rates have been fairly stable.
Mortgage rates shot up during the first part of 2018, catching a lot of Seattle home buyers off guard. But they’ve since leveled out, settling into the upper-4% range (on average).
In November 2019, Freddie Mac’s economists reported the following:
“Mortgage rates stabilized the last couple of months as interest rate sensitive sectors such as new auto and home sales softened the outlook for the economy. Homebuyers pounced on the stability in rates as purchase mortgage applications increased…”
Economists from both Freddie Mac and Fannie Mae have predicted the 30-year mortgage rates will average around 5.1% during 2019. So the expectation is that they could rise gradually next year, but not by much. It’s another reason why 2019 could be a great time to buy a home in Seattle.
3. The local job market is strong, going into 2019.
The Seattle metro area currently has a strong and stable job market. This is important for those home buyers who need to use mortgage loans to finance their purchases. A robust economy gives buyers more confidence, by making it easier to find employment.
According to the Bureaus of Labor Statistics, the Seattle-Bellevue-Everett metro area had an unemployment rate of just 3.3% as of October 2018. That was lower than the national average for the same month, and it points to a strong local economy.
4. Home prices are slowing, giving buyers ‘breathing room.’
Home buyers in Seattle are finally getting a chance to catch their breath, after the double-digit price growth of previous years. Home values in the area are rising more slowly now than in the past.
One recent forecast predicted that the median home price in Seattle would rise by around 2% – 2.5% over the next 12 months. A couple of years ago, the median value was rising by double digits annually. So there’s definitely a cooling trend happening across the area.
Those planning to buy a home in Seattle in 2019 probably won’t feel as rushed as those who purchased in previous years.
5. Sellers appear to be more motivated and flexible.
Here’s another sign that 2019 might be a good year to buy a home in Seattle. Sellers are more willing to negotiate — and to lower their prices.
According to a November 2018 article in The Seattle Times:
“At the start of the spring , when the local market was still on fire, just 5 percent of all homes on the market in the metro area had a reduced listing price … Now, 22 percent of all listings are being pitched at a reduced price, the most since Zillow began tracking the data in 2010.”
These and other trends suggest that sellers are more motivated today than in the past, and are more willing to “bend” a bit in order to land an offer.
Granted, Seattle is still not a buyer’s market in the traditional sense. And it probably won’t be for quite some time. But things are clearly shifting in a way that benefits home buyers, giving them more negotiating leverage.