Yesterday John Wahl stopped by the office and shared a Puget Sound Market Trends report from New Home Trends, Inc. The Puget Sound Market Trends report covered King, Kitsap, Thurston, Pierce and Snohomish County and most of what the local real estate industry is experiencing is reflected in the data.
Housing prices increased dramatically from 2002 until 2007 which was amplified by the loose lending restrictions and the flipping craze. It seemed that everyone was purchasing multiple properties, leveraging one property to purchase a second, with a smooth sailing forecast of rising housing prices. But that bubble came to an end and now many are facing the results of a correcting market.
Eventually, affordable single family housing started to dwindle and now the real estate market is saturated by inventory that “has to be sold”.
Across the Nation appreciation levels grew much fast than they did Seattle. From the 1st Quarter 2005 to the 1st Quarter 2008, cities like San Diego, Phoenix, Las Vegas, Sacramento and Miami experienced appreciation levels greater than 20% where as Seattle’s grew 10-17% and has had less of a correction (the follow Quarters will show a more accurate correction).
New construction has felt the impact of the changing real estate market as well. Builders have a lot of standing inventory and sales continue to be sluggish; the biggest contributor to low lot sales in Quarter 1 and 2 of 2008. In May 2008, the 5 Counties had a total of 528 new construction sales; nothing to get excited about.
But on the flip side. Snohomish County is still experiencing a good influx of people moving to the County with the largest being from California, 2,220 (California had 17,060 people surrender license from CA to WA). A variety of reasons factor into these moves; new employment, Naval relocations, cheaper housing and so on.
These moves are not going to prop up the local real estate market but it maybe enough to help stabilize what has been a declining market.
New Home Trends, Inc gazed into their crystal ball and forecasts the following: get through the elections, fuel prices stabilize, California will begin to turn, the media will paint a positive picture, interest rates will inch upward with a normal market returning in 2010.
In my opinion, the real estate marketing in Snohomish County will continue to decrease through the remaining months of 2008. The election are going to impact our economy more than maybe realized so it will be no surprise if we see a little surge in the first months of 2009 and stabilization the remaining months.
2009 could be a great time to purchase because the market will have finally hit bottom and prices will not be fluctuating. So in the mean time if you are thinking about purchasing in the coming year get your credit cleaned up, put together pay stubs (stated income is a major factor in getting a loan) and start saving for a downpayment.