Do you plan to buy a home in Washington State in 2017? If so, you’ll want to bring yourself up to speed on current real estate conditions. Because a lot has changed over the last couple of years. Here are five things you should know before buying a home in Washington State in 2017.
1. Mortgage rates are higher, as we head into 2017.
Home buyers who purchase a home in Washington State in 2017 will likely encounter higher mortgage rates than those who bought in 2016. Over the last few weeks, mortgage rates surged to their highest level in two years.
According to the weekly market survey conducted by Freddie Mac, the average rate for a 30-year fixed mortgage loan rose by 0.78% from November 3rd to December 29th. So we are going into 2017 with higher rates across the board. This will affect anyone buying a home in Washington State in 2017.
Side note: Sammamish Mortgage offers highly competitive rates on a variety of mortgage loan products. Contact us today for a free quote.
2. Home prices rose steadily in 2016, and are still rising.
In nearly every city in Washington State, home prices rose steadily during 2016. They rose by double digits in some markets, including the Seattle metropolitan area. As a result, affordability is a bigger concern for anyone buying a home in Washington State in 2017.
Earlier this year, a report by the real estate data company CoreLogic showed that home prices in Washington were rising faster than any other state in the U.S. So those who buy a home in 2017 will encounter higher housing costs than those who purchased in the past.
As of December 29, 2016, the median home price for Washington State was just over $316,000. In Seattle, the median value had climbed north of $600,000 (and counting).
And prices aren’t done rising yet. The economic researchers at Zillow expect home prices across the state to rise by another 5% in 2017. House values in the Seattle metro area are predicted to rise by around 6%, according to Zillow.
3. Loan limits have gone up, in response to rising home values.
Rising home prices often lead to higher loan limits, and that’s exactly what will happen next year. Federal housing officials recently announced they will raise the maximum loan limits for conventional, FHA and VA loans. This will apply to anyone buying a home in Washington State in 2017, as the change takes effect in January.
Loan limits vary by county. You can view limits for every county in Washington State on this page of our website. (Note that there are links at the top of the page for FHA, VA and conventional.)
4. Competition among buyers will remain high, especially in the Seattle area.
Washington State attracts residents from elsewhere in the country, and for a variety of reasons. This increases demand for housing on both the rental and purchase side. But at the same time, there is currently limited inventory in many parts of the state.
Nowhere is this imbalance more evident than in the Seattle metro area. Strong demand and limited supply are forcing buyers to compete fiercely for choice properties. Houses tend to sell quickly and often at or near the asking price.
If you’re planning to buy a home in Washington State in 2017, be prepared for some competition. Anything you can do to make yourself more competitive is worth the effort. And that brings us to item #5…
5. Buyers should enter the market with their financing lined up.
It’s important to have your financing squared away, before making an offer on a home. This will increase your chance for success. If you’re making an all-cash offer, the sellers will probably want to see proof that you have the funds in the bank. If you’re using a mortgage loan, most sellers will want to see a pre-approval letter from a lender.
Pre-approval is when you work with a mortgage company before finding a home, to determine how much you’re able to borrow. This helps you in several ways. Once you’ve been pre-approved for a certain amount, you’ll be able to focus your shopping efforts within that price range. Additionally, sellers will be more inclined to accept your offer. Pre-approval is a good place to start, when buying a home in Washington State.