Summary: Seattle inventory continues to be really tight compared to the rest of the country. So what does that mean for buyers looking to purchase a home in Seattle in 2020? This article will provide more information.
For the last few years, Seattle has generated countless headlines due to rapid home-price growth and scant inventory. Housing inventory in Seattle and across King County has been incredibly tight over the past couple of months, sending prices higher and sparking stronger demand and competition among buyers.
Buyers who are planning to enter the local real estate market during 2020 should be prepared for some competition. The better prepared you are – both financially and emotionally – the better you will do when it comes time to put an offer on a home.
Reports: Seattle Housing Market Inventory Tight
Let’s start with a real estate reality check. While the market in Seattle has cooled over the past year, as prices have actually dipped slightly. But things are heating up again and prices have already been rising and are expected to increase over the next year.
The Seattle housing market is currently suffering from a below-average level of supply. A “balanced” market has about a five- or six-month supply of homes for sale at any given time. As of early 2020, however, Seattle had about a 1-month supply.
This housing inventory shortage has presented some challenges for buyers, forcing them to compete for limited supply. And that’s been the “norm” for the last few years.
Delay in Inventory Buildup
Local housing inventory typically begins in the early months of the year and plateaus in the spring, but so far in 2020, we haven’t seen this influx of supply. Instead, what we’re seeing is high demand that is overwhelming current inventory, The homes that are available for sale cannot keep up with demand.
A recent article in The Seattle Times stated:
“Home sales are exceeding the volume of inventory coming onto the market. It looks like we’re headed back to a market that looks a lot like 2017.”
Strong Labor Force Fueling Demand
Another factor contributing to high demand is the strong local labor force, employing people with high-paying jobs and making them more financially capable of buying a home. According to the Bureau of Labor Statistics, employment in the Seattle area increased 3.4% from December 2018 to December 2019. This is putting further stress on the housing inventory in Seattle as buyers continue to flock to the real estate market in the area.
Prices Expected to Increase Throughout 2020
All of the forecasts we have seen for the Seattle-area real estate market predict that home values will increase over the coming months.
The region’s strong economy and natural beauty attract new residents from elsewhere in the country, at a time when housing inventory is tight. Right now, the average price of a home in Seattle is $752,100. That’s 0.7% lower than the same time last year, but it’s expected to increase 3.9% over the next 12 months.
That means buyers who wait to purchase a home will be met with higher prices compared to wait they would pay if they bought sooner rather than later.
Low Mortgage Rates Fuel Homebuying
Mortgage interest rates are at their all-time low, currently sitting at 3.29%. Given such a low rate, many homebuyer hopefuls are looking to capitalize on these low rates to help save tens of thousands of dollars – or more – in interest paid over the life of their loan.
Need a Home Loan in Seattle?
Will you need mortgage financing to buy a home in Seattle? We can help. Sammamish Mortgage has been serving buyers across the Pacific Northwest for about 28 years. We offer a wide variety of mortgage products with flexible qualification criteria in WA, OR, ID, and CO. Please contact us today with any financing-related questions you have.