Are you thinking of buying a home in Redmond, WA? Considering the magnitude of such a purchase, you’ll certainly want to go into the process armed with as much pertinent information as possible. And that’s precisely what we’ll be providing you with in this article.
This blog post is part of an ongoing series for home buyers across Washington State. Today, we’ll take a look at Redmond, Washington to help you determine your strategy for getting into the market to buy a home. The following information will be useful for prospective buyers who are looking to buy a home in Redmond.
At a glance: Redmond is a city in King County and is located about 15 miles east of Seattle. It’s considered one of the best places to live in the state and offers residents a unique urban/suburban mix. As of the latest census data available, the population of Redmond is currently about 67,700. While it is very close to Seattle, Redmond’s real estate market is more expensive.
Understanding the Redmond Housing Market
As a home buyer, it’s important that you take some time to understand the current real estate market temperature in the area you are looking to buy in. In this case, that would be Redmond, WA.
Historically speaking, home prices in Redmond are typically higher than those in nearby Seattle. They are quite expensive and are far above the statewide average. This is something that all buyers should know when buying a home in Redmond.
As of March 2022, the average home price in Redmond is currently $1,370,711. That’s quite a bit more expensive than Seattle, which has historically been one of the pricier markets in the country, with an average home price of $932,382. For comparison purposes, the average home price in Washington State is currently $593,897.
Home prices in Redmond have increased 32.4% over the past 12 months, according to real estate research firm, Zillow.
Housing markets change regularly. It could be a hot, competitive market today, and a cooler market tomorrow. The temperature of the market is important to understand because it will dictate how prices will rise, how much inventory there may be available, and how quickly you may have to act as a buyer to get the home you want at the price you can afford.
Home prices in Redmond have risen sharply over the past 5 years, though they tapered off by mid-2018. In fact, home prices more than doubled from 2012 to 2018, after which they slowed down quite a bit and even dipped for about a year before starting to pick up again.
The current real estate market in Redmond is an important factor that buyers should understand about buying a home in Redmond. Home prices are not cheap, and the market is still competitive. Buyers will want to team up with an experienced real estate agent and mortgage company to ensure the home buying process in Redmond is a streamlined one.
Inventory Supply Affects Home Prices
Like the rest of King County and many other parts of Washington State, Redmond’s housing inventory is typically tight. Redmond is an attractive place to live, much like Seattle, which is why inventory is usually well under what is considered to be a balanced market.
Tight inventory conditions in Redmond are stimulating competition among buyers in the city, much like in many other parts of the Seattle Metro Area. As such, this tends to lead to quick sales.
Right now, there is only about a 1-month supply of inventory available for sale to accommodate the current demand for housing in Redmond.
This seems to be a common theme in Washington: ongoing tight inventory.
Closing Costs For Buying a Home in Redmond
There are many components and expenses associated with buying a home in Redmond. For instance, you’ll need to cover closing costs, which can include many things, such as:
Closing costs typically range from 2% to 5% of the purchase price of the home. This amount will need to be paid upon closing of the transaction. Closing costs can include any one of the following:
- Home inspection fees
- Appraisal fees
- Mortgage underwriting fees
- Earnest deposit
- Transfer taxes
- Legal fees
- Title insurance
- Homeowners insurance
- Adjustments on utility bills prepaid by the seller
- Property taxes
- Real estate agent commissions
These fees can add up, so it’s important that you understand what your financial obligations are when you close on a house so you can budget accordingly.
Down Payments in Redmond
In addition to understanding the closing costs associated with buying a home in Redmond, you’ll want to know how much of a down payment you’ll need to buy a home in Redmond. A down payment is a major financial component of getting a mortgage and buying a home in Redmond, so it’s important and helpful that you understand your financial obligations.
The down payment amount needed on a home in Redmond can vary. In fact, you may be able to qualify for a zero down payment option if you are a member of the military and are eligible for a VA loan. In this case, no down payment would be required.
Otherwise, there are other loan options available, each of which comes with its own down payment requirements. A conventional loan, for instance, allows down payment amounts as low as 3%, while FHA loans require minimum down payment amounts of 3.5%. If you want to avoid paying Private Mortgage Insurance (PMI), then you would need to come up with a 20% down payment.
As you can see, the amounts vary. For illustration purposes, we’ll show you a range of down payment amounts you would be responsible for coming up with based on a home price of $900,000 (please note that home prices in Redmond will change regularly – this is just for illustration purposes). Based on that price, a 3% down payment would translate into $27,000, while a 20% down payment would equate to $180,000.
Of course, you could always come up with an amount in between these numbers, or even more. The down payment you provide will depend on your finances, your credit profile, the type of mortgage that you choose, and the lender you work with.
The interest rate that you lock in at will also influence the price you pay for a home in Redmond. It is important to note that different mortgage programs will comes with their own interest rates, even though they may not be too far off from each other.
From 30-year fixed-rate mortgages, to 15-year fixed-rate mortgages, to 5/1 adjustable-rate mortgages and beyond, you’ll want to find out what the exact interest rate is for the different mortgage products available to get a clear picture of how much your mortgage is going to cost you.
Right now, the current mortgage interest rates are as follows:
- 30-year fixed rate mortgages: 4.42%
- 15-year fixed-rate mortgages: 3.63%
- Adjustable-rate mortgages: 3.36%
Buying a Home in Redmond
Being educated in the housing market in Redmond and the average price of a home that you can expect to pay will help better prepare you as a buyer. You’ll want to get your finances in order and ensure your credit profile is healthy.
You’ll also want to team up with an experienced real estate professional and mortgage company in Redmond to help you realize a successful transaction. Being adequately prepared will ensure a better outcome when you buy a home in Redmond.
Ready to Buy a Home in Redmond?
Do you have questions about mortgages? Or are you ready to buy a home in Redmond and want to apply for a mortgage? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado since 1992. We offer many mortgage programs with flexible qualification criteria. Contact us today with any questions you have about home loans.