Boy have times changed and I wouldn’t have pegged Snohomish County to be experiencing similarities to the most recent real estate bubble. Without the sub prime markets, predatory activities, and general real estate fever, Snohomish County has been shifting back to the boom of 2003 – 2007. This something I’ve been foreseeing by watching the statistics and, in my opinion, is directly correlated to the lack of housing supply. We are one month away from my first prediction of a seller’s market in June 2011 and each successive market report has corroborated that idea.
Supply & Demand for Sold and Housing Inventory
Denoted by the blue columns, homes under contract have skyrocketed to levels not expected in a depressed real estate market. The reason the under contract homes have risen so sharply is that the housing supply has declined yet the size of the buyer pool hasn’t. The green columns indicate the number of sold homes in Snohomish County. Though not as dramatic as under contracts, sold homes are seeing a increase as well, however, it appears the sales will equal the figures of Summer 2011.
The below chart shows the decrease of available, or active, homes in Snohomish County which is down to 2.2 months – flash back: 2.2 months of home inventory means that if the homes currently aactive were to sell, and nothing new come available, then there would be no homes for sale at the end of those 2.2 months. This chart illustrates what type of market we are in now. Low inventory and high competition.
Will Housing Inventories Remain Low Through Summer?
The foreclosure sector may provide some relief for buyers whom are missing good opportunities due to escalation clauses and over bidding of homes. According to ForeclosureRadar.com, there has been a 6.69% increase in foreclosed homes being scheduled for sale – how long before they hit the market will depend on their condition and making them marketable for sale. It will be interesting to see how many homes come on the market when compared to the easing of competition.
Declining Days on Market for Homes
Declining days on market is another indicator showing that Snohomish County real estate market is favoring sellers. If you have been thinking about selling your home then now is a great time before the bank foreclosures become available. According to the data, if you listed tomorrow then you could expect to sell sometime in late July. Not a shabby turn around.
Median Home Prices Rise
For the 3rd consecutive month, the median home price in Snohomish County real estate has risen marking another milestone for sellers. At just over $250,000 that has to make people around the County jump for joy but I wouldn’t get your hopes up that prices will continue to rise. One trend I’ve been hearing is that the banks will be releasing homes at a constant rate as not to depress their inventory’s prices as they did in 2009 through 2011.
What Does Low Inventory and Rising Prices Mean for Consumers?
Low inventory levels means buyers are either having to settle on homes in which they sorta like or wait till that home comes on the market. If the second option is your choice then be prepared for multiple offers because more than likely someone else likes the home too.
Watch out though and don’t get caught in the hype of buying and driving the price to astronomical levels. The problem with driving prices up is two fold:
1). Paying to much for a home / asset and not recouping the value like what happened during the boom.
2). With such high prices the home may not appraise for the value agreed upon.
The last item opens up a whole new negotiating with the seller and seller may not want to come down after seeing how much more they may get for the home. So make sure you’re happy with the decision moving forward because you don’t want to loose the home in the event Snohomish County experiences another nose dive.