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.
In some ways, 2020 is the “year of the buyer” in Seattle’s housing market. Inventory remains tight, but many other factors point to a great year for local home buyers. Along those lines, here are three big predictions for the Seattle housing market in 2020.
Predictions for Seattle Housing Market in 2020 and Beyond
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 2020, house values have increased. Housing stock continues to be tight, which has reduced supply despite.
Those are three data-based predictions for the Seattle real estate market through 2020.
1. Home Prices Have Risen Over the Past Year
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 that changed from mid-2018 to mid-2019. During that time, there was an increase in the number of home sellers reducing their list prices. In early spring 2018, only 5% of all homes listed for sale in the Seattle metro area had a reduced listing price. But that number jumped by late 2019.
However, prices picked up again. According to Zillow, home prices in Seattle climbed 2.2% over the past 12 months. As of the first week of May 2020, the average price for a home in Seattle is $767,900.
2. Affordability Still Remains an Issue
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 $102,516 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 3.28%, which is a far cry from where rates were just a year ago. And they’re expected to stay low throughout the year. Considering this, it might make more sense to buy a home in Seattle sooner rather than later to take advantage of low rates.
3. There Could Be a Better Balance of Supply and Demand
Over the last year or so, inventory has been the big story within the Seattle-area real estate scene. The number of homes for sale across King County continues to be short of demand. For the past few years, the Seattle housing market has been marked by a significant drop in inventory, which played a key role in the skyrocketing of home prices, as homebuyers fiercely competed with one another for limited supply.
Inventory continues to be tight. In King County, there is barely a 1-month supply of available homes for sale. This situation seems to perpetuate as time goes on.
Because of the tight inventory in Seattle, buyers within the Seattle-area real estate market still have fewer properties to choose from in 2020.
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.
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