Washington State experienced strong seller’s housing market in the last few years, due to rapidly increasing home values and uncertain market rates for buyers. It looks like the pendulum is swinging back towards the buyer’s advantage so far in 2019.
Here are three important updates to consider when buying a house in Washington State in 2019.
1. Home prices in Washington state are starting to plateau.
You probably already know that home prices in Washington have risen steadily over the last couple of years. It has generated quite a few headlines. In fact, house values in Washington have risen more over the last couple of years than almost any other state in the country.
This is especially true within the Seattle metro area, which saw huge gains over the last few years. But most other cities have experienced steady price growth as well.
Forecasts for 2019 home prices reflect a much needed cool down.
According to the real estate data company Zillow, the statewide median home value steadily rose to its highest value in June 2018. That was an increase of more than 10% from the same month a year before. Looking forward, the company’s economists predicted that the median home price for Washington may see some smaller increases in median home value, but other areas, like Seattle, would remain stable or slightly decrease.
Compare the median home prices in several Washington State neighborhoods from April 2018 to April 2019, according to Zillow:
|City||April 2018||April 2019|
So, should you buy a house in Washington now, or wait until next year? Current trends and forecasts make a strong argument for buying sooner rather than later. Prices have plateaued and interest rates are low.
2. Mortgage rates decreased early 2019.
At the end of the first quarter of 2019, mortgage rates were at their lowest than they had been since February 2018. It is forecasted that the rates should remain stable throughout 2019. This is a stark contrast to rates in 2018 that were volatile, unpredictable, and saw a sharp increase at the end of the year.
As of April 11, 2019, Freddie Mac announced that the average rate for a 30-year fixed home loan fell to 4.12%.
3. Housing inventory still below “normal” in most markets for 2019
Inventory is still low for home buyers planning to buy a house in Washington in 2019, and that has been the trend for the last 10 years or so. However, experts agree that the inventory should increase for 2019. That means that homebuyers will have more options to choose from. Much of the increase in homes available is due to Amazon’s opening of their second headquarters.
A balanced real estate market has about five to six months worth of supply. That means it would take five to six months to sell all of the homes currently listed for sale, assuming that no new ones came onto the market in the interim. This is also known as the market absorption rate.
Many of the real estate markets across Washington State had less than a two-month supply of homes for sale, as of January 2019. In the Seattle metro area, where housing demand is particularly strong, currently less than a two month supply exists. New condo projects are currently being built, and many more are on the way. This should ease the inventory crisis as well.