We are well into summer and past the midpoint of the year. That means some prospective home buyers in the Seattle area have begun to ask that perennial question: Would it be better to buy a house or condo in Seattle now, or should I wait until 2019? Which would be the best time to buy?
Given current trends within the local real estate market, it might be better to jump in sooner rather than later. Here’s why.
Prices Projected to Rise Further, as of Summer 2018
Mortgage rates have settled down a bit, following a steep climb during the first part of 2018. But home prices in the Seattle metro area continue to rise steadily — and show no signs of stopping any time soon.
According to the latest MLS data and real estate reports, the median home price in Seattle has now risen above $800,000. That’s within the city itself. Across the broader metro area, relative bargains can be found.
In nearby Tacoma, for example, the median home value was closer to $300,000 as of June 2018. So there’s quite a bit of variance in terms of house prices.
(Hint: You can think of Seattle proper as the “nucleus” for higher home prices, with values dropping off substantially as you move into the surrounding areas.)
Despite these regional differences in house values, all real estate markets in the Seattle metro area have one thing in common. Prices are predicated to continue rising over the coming months, and as we move into 2019.
Related: Outlook for the Tacoma market
Should You Buy That Home Now, or in 2019?
Getting back to the question at hand. Should you buy a home in the Seattle metro area during the latter part of 2018, or wait until 2019?
If you’re sure you want to buy, a strong argument could be made for doing it sooner rather than later. House values are projected to continue climbing, partly due to the lack of inventory in the area. So a postponed home purchase might mean that you’ll end up paying more for that house.
For instance, a June 2018 forecast from Zillow predicted that the median home value for the Seattle metropolitan area would rise by around 7% over the next 12 months. Granted that’s just one forecast. But when you look at the current supply-and-demand situation in the area, it’s plausible to suggest that home values would continue to rise.
Give Yourself Some Lead Time When House Hunting
There’s another reason to start your home search sooner rather than later. It might take a while, due to the shortage of housing inventory across the Seattle metro area. As of May 2018, there was less than a one-month supply of homes for sale in most cities in the area. That’s well below what is considered to be a “balanced” market.
There are a variety of factors causing this supply shortage. They range from sluggish construction to homeowners being reluctant to sell (despite the profit potential). These and other factors contribute to the ongoing supply shortage that’s affecting the Seattle metro area real estate market.
Current conditions also underscore the importance of being pre-approved for a mortgage loan. This is practically a necessity in a hot market like Seattle. It will allow you to conduct a more focused and efficient home search, based on a specific price range. Pre-approval also shows sellers that you’re a serious buyer.