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Summary: Having a little foresight into what the local real estate market will do in Seattle can help buyers and sellers make better-timed decisions. The question is, what is the real estate market in Seattle doing this year? This article will explain.
2021 was once predicted to be the “year of the buyer” in Seattle’s housing market. Yet, with the ongoing pandemic, inventory remains low, this along with many other factors, point to a continued Seller’s market. Along those lines, here are three big predictions for the Seattle housing market in 2021.
There was quite a slowdown in the market in Seattle, with home prices having actually declined over the past couple of years. This prompted home sellers to be more likely to lower their prices. But in 2021, house values have increased. Plus, housing stock continues to be tight, all of which has significantly reduced supply.
That said, here are the top three data-based predictions for the Seattle real estate market through 2021.
Two or three years ago, price reductions were a rarity in the Seattle real estate market. As long as sellers priced their homes close to comparable sales, they were practically guaranteed to have buyers lining up. And in many cases, those buyers were making offers well above the asking price.
But times have changed, as it is now projected that from now until November 2021, home prices will rise nearly 9% in Seattle. Clearly, there is no denying that Seattle has seen some of the fastest price appreciation among major cities throughout the country, over the last couple of months. This was evident throughout much of 2020, as home prices in Seattle rose drastically year over year. Moreover, low-interest rates continue to make it easier for borrowers to afford their monthly mortgage payments and open up the market for first-time homebuyers.
As a result, According to Zillow, people can expect low inventory to continue well into 2021. However, the inventory shortage in the city might not be as “acute” in the Seattle region in the spring and summer for a variety of reasons, including the increase in residential construction.
While home prices declined in Seattle a couple of years ago, they crept back up and remain some of the highest prices in Washington. The price for a home in the city is still far more expensive than most other cities in the state of Washington. This makes housing affordability an issue.
According to reports, homebuyers and owners need an annual income of $106,618 to be able to afford the principal, interest, taxes, and insurance payments on an average-priced house in the city. For many households, this number is not easy to attain, therefore making homebuying in Seattle difficult.
However, mortgage rates are very low right now. As of this writing, the rate for a 30-year fixed-rate mortgage is 2.80%, which is a far cry from where rates were just a year ago. And they’re expected to stay relatively low for the next few months at least. Considering this, it might make more sense to buy a home in Seattle sooner rather than later to take advantage of low rates.
Despite the expectation that demand for real estate and home sales would eventually plummet due to COVID-19, this simply hasn’t happened. In the Seattle housing market, in particular, low mortgage rates are actually fueling demand and aiding some buyers to get more affordable mortgages. As briefly mentioned, these buyers are not letting the chance to get historically low mortgage rates pass them by—and this is predicted to be the case for as long as rates remain low.
Ultimately, all signs point to the mortgage rates for 2021 remaining low. In fact, Fannie Mae predicts that they will go as low as 2.9% next year. With this, the Seattle housing market prediction is that demand and home sales will continue to rise, driven by low mortgage rates.
Disclaimer: This article contains housing-related predictions that are based on current conditions, and those conditions could change over time. These forecasts are the equivalent of an educated guess and should not be viewed as certainties.
Will you need mortgage financing to buy a home in Seattle? We can help. Sammamish Mortgage has been serving buyers across Washington, Oregon, Idaho, and Colorado since 1992. We offer a wide variety of mortgage products and programs with flexible qualification criteria. Please contact us today with any financing-related questions you have.
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