Seattle Real Estate Trends, January 2015

Posted on February 11, 2015 by Steve Laevastu

Although the groundhog predicted six more weeks of winter, the Seattle real estate market is hopping like it is spring. Check out the market trends below.

Inventory of Listings

We are starting the year once again with a shortage of inventory in many of our Seattle neighborhoods. Since there are buyers in the market right at this moment, I see this as a window of opportunity for sellers before spring to sell before additional competition comes on the market and interest rates begin to creep up which will limit some buyers. Of course, whether the time is right for you to make a move will depend on a variety of factors including where you want to move to. If you are considering a move, please schedule a meeting with me as soon as possible to explore your options.

Below is a table comparing the number of active listings (supply) and pendings (demand) for several of our Seattle neighborhoods (these numbers include single family residences as well as condos). We are looking at January 2014 versus January 2015:

seattle-real-estate-trends-jan2015-01

Median Sales Prices

As a result of this low inventory, prices are up year over year in most neighborhoods. Check out Queen Anne / Magnolia with a 28% increase! However, with the inventory numbers above, there is bound to be increased demand. The opposite is currently true in Belltown / Downtown. The number of active listings has increased, and pendings have decreased. Prices seem to be adjusting accordingly, but it will be interesting to note if this is an ongoing trend.

seattle-real-estate-trends-jan2015-02

Want to learn more about what our 2015 market means for your real estate investment goals? Contact me at sold@windermere.com or give me a call: (206) 226-5300.

Seattle Real Estate Market Update 2014 Review

Posted on January 13, 2015 by Steve Laevastu

2014 was another strong year in our market! Just how strong? Check out the numbers below!

Inventory of Listings

Below is a table comparing the number of NEW active listings (supply) and pendings (demand) for several Seattle neighborhoods: Central Seattle, Queen Anne/Magnolia, Belltown/Downtown, Ballard/Greenlake, and North Seattle (these numbers include single family residences as well as condos):

2014reviewmarketupdate01

In Central Seattle, we saw both a drop in new active inventory along with homes under contract. Queen Anne/Magnolia saw a drop in new active listings along with a small drop in pendings (indicating this is still an area with high demand). Belltown/Downtown saw a large increase in new active listings which were mainly condo based. Inventory was absorbed quickly with Belltown/Downtown sporting both the largest swing in new active listings and new pendings.

Ballard/Greenlake saw both a slight increase in new active listings along with pendings while North Seattle continued its high demand profile with a slight decline in new active listings and a slight increase in pendings.

Median Sales Prices

Median sales prices tell the story even further. It shouldn’t surprise you to see that median sales prices are up across the board in Seattle, ranging from 4.09% to 11.33%. Below are the median sales price averages for the neighborhoods I track comparing 2013 to 2014. Remember, these prices include both residences and condos.

2014reviewmarketupdate02

Please contact me at sold@windermere.com or give me a call: (206) 226-5300 to learn more about what to expect for 2015!

Seattle Real Estate Market Update – November 2014

Posted on December 11, 2014 by Steve Laevastu

The holidays are upon us and with the wintery weather we saw last month, it looks like several areas are seeing a temporary cooling off while people are focused on their holiday activities. This can spell a great opportunity for both buyers and sellers because the most serious of these are still in the market!

Buyers, if you have been waiting, trying to avoid competing, now might be your moment. Sellers, there ARE serious buyers out there which could spell opportunity. What should you keep your eyes open for this holiday season?

Inventory of Listings

Although the number of listings and the number of pendings has declined moving from October into November (which is normal for this time of year), it is interesting to note that the number of homes on the market has decreased looking at year over year number of listings. Comparing November 2014 and November 2013, the number of available listings has deceased in all five of the neighborhoods I track:

Central Seattle -22.9%
Queen Anne -8.8%
Belltown -8.3%
Ballard -6.5%
North Seattle -8.5%

Below is a table comparing the number of active listings (supply) and pendings (demand) for several of our Seattle neighborhoods (these numbers include single family residences as well as condos):

seattle-market-update-2014-nov-01

Median Sales Prices

Median sales prices have taken a slight step back in Central Seattle, Queen Anne/Magnolia, and Belltown looking at the year over year comparison between November of 2014 and 2013. If you look at the table above, specifically the ratio of active listings to pending listings, note that in the areas where the number of pendings is close to the number of active listings (such as North Seattle where the number of active listings is 118 whereas the number of pendings is 117) we aren’t seeing the price declines that some of the other areas see.

seattle-market-update-2014-nov-02

Please take time during this month to contact me at sold@windermere.com or give me a call: (206) 226-5300 to learn more and to receive my 2015 predictions for the real estate market!

Urban Land Institute Names Seattle in Top 10 Markets to Watch in 2015

Posted on November 25, 2014 by Steve Laevastu

Urban Land Institute has released their “Emerging Trends in Real Estate” report for 2015 and the news for Seattle is favorable!

The Institute points to the principle of the “24-hour city” which needs to be adopted by urban areas in order to have a thriving downtown. They note that downtown transformations need to combine “housing, retail, dining and walk to work offices to regenerate urban cores” in order to increase investment for single family and multi-family housing. While most of the emerging, revitalized urban centers aren’t true 24-hour cities, they have certainly expanded from 9-5 town into “18-hour markets”. According to the report, investors are attracted to markets with “vibrant urban centers”. Some of Seattle’s most vibrant neighborhoods fit this bill.

In the report, the Urban Land Institute points to different Markets to Watch in 2015. The basis for these being markets to watch is the demand for “desired assets” which is expected to drive prices up and returns down and subsequently the need for alternative investment options which yield higher returns. One strategy noted for this in the report was the potential for investors to look at markets close to a major metropolitan area.

Seattle ranked 8^th on the list overall which measures investment, development, and home building potential in 2015. Portland, Oregon ranked 16^th and Tacoma ranked 62^nd (this is the first year Tacoma has been measured as a separate entity outside of Seattle).

Another factor that was examined was population growth. Between 2010-2013, the urban population growth in Seattle rose 6.9% to 2.88 million people which also helped its placement in the “good market” category.

Technology is a local driver of employment in Seattle and the millennial generation is flocking in to take those jobs. It is a “top capital destination” which attracts institutional and local investors.

The report predicted that the job market in Seattle will expand 2.6% in 2014-2015.

We have a lot to be thankful for in Seattle this Thanksgiving. A robust job market, strong population growth, and of course, we live in the most beautiful place in the country! Happy Thanksgiving to you!

View Urban Land’s Emerging Trends in Real Estate report

Seattle Real Estate Market Update September 2014

Posted on October 14, 2014 by Steve Laevastu

Listing Inventory

Below is a table comparing the number of active listings (supply) and pendings (demand) for several of the Seattle neighborhoods I specialize in: Central Seattle, Queen Anne / Magnolia, Belltown / Downtown, Ballard / Greenlake, and North Seattle.

SeattleMarketUpdateSept2014-01

The above includes residential and condos.

Our fall market is starting off in an interesting fashion where inventory is shifting throughout the city. As you can see in the above table, inventory as increased or decreased slightly in most areas, but Queen Anne/Magnolia’s shift is most dramatic with an increase in active listings and a decrease in pendings. Since this is an area of the city that has seen some of the greatest demand in recent months, this could provide a little breathing room for buyers wanting to buy in that area. When the MLS measures the market, they also look at “months of inventory” which indicates that at the current demand, if no additional homes went on the market, the inventory would be purchased within “x” months. For Queen Anne/Magnolia, we are looking at two months of inventory for September. It has fluctuated between 1-3 months since March of 2012.

In Belltown, inventory decreased slightly but the pending numbers are up 30% over August and 81.4% over last year. Belltown’s Months of Inventory have fluctuated between 2-4 months since March of 2012 and is currently listed at 3 months.

Central Seattle is currently at two months of inventory (it has fluctuated between 1 and 3 since March, 2012), Ballard/Greenlake is currently at 1 month of inventory (where it has solidly been since February of this year), and North Seattle is also at one month of inventory which is where it has been since January of 2013.

SeattleMarketUpdateSept2014-02

Median Sales Prices

Median Sales Prices are on the rise across the city, comparing September of 2013 to September of 2014. These are modest price increases that can spell great news for homeowners with increased equity.

SeattleMarketUpdateSept2014-03

Want to know how the fall is shaping up in your neighborhood? Please give me a call or send me an email: (206) 226-5300 or sold@windermere.com.

Multitudes of Millennials in Position to Purchase in Seattle Metro Area

Posted on September 29, 2014 by Steve Laevastu

According to the National Association of REALTORS® the Seattle Metro Area is one of the top ten markets in the country with the Millennial generation poised to lead the charge of first time homebuyers. Seattle, along with metros such as Austin, Dallas, Denver, Des Moines (Iowa), Grand Rapids (Michigan), New Orleans, Ogden, and Salt Lake City have strong job markets with jobs that appeal to this generation and the demand for housing hasn’t priced first time homebuyers out of the market like in New York, Los Angeles, and San Francisco.

According to NAR Chief Economist, Lawrence Yun, “NAR research finds that there are…metro areas millennials are moving to where job growth is strong and home ownership is more attainable. These markets are well-positioned to soon experience a rise in first-time buyers as the economy improves.”

The homeownership rate for young adults (under the age of 35) was 43% in 2005 (the peak) and the rate has fallen from that peak to 36% in the first quarter of 2014.

NAR measured current housing conditions, housing affordability (measured by incomes, interest rates and median home prices), job creation, and population trends across the country in metro areas that have a large millennial presence. NAR expects that as life events present themselves (marriage, kids) millennials will want to settle down and purchase a home rather than rent and live in close quarter. As long as market conditions hold and affordability is maintained, millennials are poised to be our next wave of first time homebuyers.

What does this mean for current homeowners? I expect demand will continue to be strong in our region as job growth is strong in our region. Over the next few years, if you own a home with market value under about $400,000, I expect that price point to increase in demand unless our builders complete new homes to meet that growing need. If you have questions for me or would like to learn more, please give me a call or send me an email: (206) 226-5300 or sold@windermere.com.

Seattle Real Estate Market Update August 2014

Posted on September 15, 2014 by Steve Laevastu

Inventory of Listings

market-update-aug-2014-01

The above includes residential and condos.

As you can see, inventory dropped dramatically in all the tracked neighborhoods. It is normal for a surge of properties to come on the market at the beginning of the summer with a good percentage pending by the end (indicative of the increase in pendings) which is one reason the inventory has decreased. However, the number of available listings in August this year versus last indicates that inventory is still below where it needs to be to keep up with demand as we head into fall. Please see the below table for the inventory comparison between this last August and 2013.

market-update-aug-2014-02

Median Sales Prices

Median Sales Price changes have continued their year-over-year increase in Central Seattle, Queen Anne/Magnolia, Ballard/Greenlake, and North Seattle year over year comparing August 2014 with August 2013. Belltown/Downtown did see a decrease. These prices are only looking at residential sales with the exception of Belltown which includes both residential and condos (since condos make up the bulk of the sales).

market-update-aug-2014-03

What does this fall look like for your property needs? Start planning now by giving me a call or sending an email: (206) 226-5300 or sold@windermere.com.

Build Wealth Through a Seattle Real Estate Investment

Posted on September 2, 2014 by Steve Laevastu

Often I am asked about the profitability of real estate investing. Real estate can be a very lucrative investment and there are a number of different avenues you can take depending on the amount you can invest, your preferred level of involvement, and your desired investment return.

Rent in the Seattle market is very high due to the demand for housing. Employment in the city limits is strong and the Seattle Times reported that average apartment rents jumped 4.1% in the second quarter of 2014 alone. Although rent rates and appreciation varies from area to area and type of rental, according to the Seattle Times, vacancy rates in King and Snohomish County are at the lowest number in nine years.

So how does this translate into a real estate investment?

Let’s take a look at one of my current listings at 12526 8th Ave NE in Pinehurst. The list price is $375,000 and with 20% down, and assuming the rent is $1,750 per month, you can see the monthly cash flow is in the negative:

buildingwealth01

Negative cash flow? How on earth can this be a good investment? Read on!

Let’s look five years down the road. If the property has appreciated at a very modest 5% per year, the $375,000 investment which had $75,000 equity when purchased now has $207,786 in equity (due to appreciation and the investor paying the mortgage for five years).

But what about the cash flow? It is true that the investor was paying out more than $100 per month in excess of what they were bringing in, but remember, that rent was at market five years ago. Let’s also account for a 5% per year increase in property taxes and insurance, and even rent (although current demand indicates this rate could be much higher). Where does that leave our monthly cash flow?

buildingwealth02

This is only for a 5% annual increase in rent. What if it were more like 7.5%?

buildingwealth03

That cash flow is in addition to the increase in equity!

Of course, this is assuming that the owner is managing the property his or herself and it doesn’t take any repairs or modifications into account. However, each property is different and has different needs.

Intrigued? Please contact me to learn more! Email me at sold@windermere.com or give me a call: (206) 226-5300