Summary: If buying a home in Washington State is on the agenda this year, you may want to consider getting in the market sooner rather than later before the spring season heats up. This article will help you determine if making a move soon is best for you.
Are you planning to buy a home in Washington during winter 2020? It might work to your advantage. Competition tends to drop off a bit after the spring, research shows.
For example, a study by Zillow found that “In Seattle, over half of the homes sold between March and May will sell above list price. By late summer this falls to one in three.” So patient buyers willing to bite the bullet and dive into the real estate market hold off until summer might benefit from a seasonal shift in demand.
With that being said, home buyers across Washington State will probably feel more urgency in winter 2020 — compared to years past. Mortgage rates are holding at low levels, making home buying more affordable. But depending on where you plan to buy, you could be facing higher prices as the months progress this year. have risen in recent months, and home prices across Washington continue to climb steadily. So many buyers are feeling the need to move quickly.
A Sense of Urgency for Washington Home Buyers This Winter?
The latest reports from real estate companies and listing services show that home prices in the state continue to climb. So those planning to buy a house in Washington this winter might want to expedite the process, if at all possible.
Here are three reasons why a sense of urgency might be warranted:
1. Home prices are almost certain to continue rising.
The median home price for the state of Washington rose to around $413,000 in January 2020. That was an increase of nearly 12% 4.3% from the same month last year. A June 2018 report from CoreLogic showed that house values in Washington State rose more than any other state from April 2017 to April 2018, posting a gain of 12.8%.
And with the current supply-and-demand situation in real estate markets across the state, it appears likely that prices will continue climbing throughout 2020 and into 2019. According to Northwest MLS, the inventory for homes was down by over 30% in seven counties. Right now, Washington has a 1.73-month supply of housing, which is far lower than a balanced market that is characterized by about 5 to 6 months’ worth of supply. Washington home buyers might want to consider buying sooner rather than later, to avoid higher costs toward the end of the year.
2. Mortgage rates are lower now than the start of this year.
In mid-January 2020, Freddie Mac reported that the average rate for a 30-year fixed mortgage loan had dipped to 3.65% had risen to 4.62%. That’s close to a one-year low, as rates have been on a steady decline for over a year. was the second-highest average of the year, and an increase of more than 60 basis points since January 2018.
Over the last few weeks, average 30-year mortgage rates have been fluctuating in the 3.5% to 3.7% 4.6% range. Low mortgage rates make home buying more affordable. And by taking advantage of these low rates today coupled with a traditionally slower time of the year for sellers, now may be a great time to buy before the heat of the spring real estate season picks up. But they might rise further as we move into the summer. Federal Reserve policy changes (and other factors) could contribute to this.
According to a recent article in the Washington Post:
“…economists say rates are still low by historical standards, but they are expected to rise further if the Federal Reserve continues to boost interest rates. Fed officials bumped up the benchmark interest rate by 0.25 percentage points to a range of 1.75 percent to 2 percent at the end of Wednesday’s meeting.”
This is another trend to watch, if you’re thinking of buying a home in Washington over the summer of 2018. There is a chance that both home prices and mortgage rates could inch upward over the summer months, and into the latter half of the year. Once again, it makes a strong case for buying sooner rather than later.
Related: 6 factors that determine your rate
3. With fewer homes available, buyers should start early.
If you’ve been following real estate market trends lately, you probably already know that inventory is tight right now. There’s a shortage of supply in real estate markets across Washington State — and especially within the Seattle metro area.
Recent MLS reports show that housing inventory is tightest at the lower end of the price spectrum (i.e., “starter homes”). That’s because there are more buyers competing within that range. But things are tight up and down the price scale.
This gives home buyers a good reason to start early, when shopping for a house in Washington. If your goal is to find a property and make an offer during the winter, you’ll want to start now. It can take longer to find a house these days, due to the supply situation.
Curious About Home Loans in Washington?
If you’re looking for more info on mortgages in Washington State, Sammamish Mortgage can help. We are a family-owned Mortgage Company based in Bellevue, Washington that has been serving the Pacific Northwest since 1992. We lend in all of Washington, Oregon, Idaho, and Colorado and provide a wide array of mortgage programs with flexible qualification criteria. Get in touch our friendly and knowledgeable staff today!