2015 definitely saw the continuation of price recovery for houses and condominiums in Seattle and on the Eastside. If you were in the market, either buying or selling a home last year, you were aware of the historically low levels of available inventory and escalating prices in most neighborhoods. With so few homes to choose from and so many buyers in the market, multiple offers were common, time on the market declined and prices rose in most communities. So what’s in store for 2016?
The Seattle/Bellevue area still ranks high nationally as a very desirable place to live and work. With a positive employment climate, more people are relocating to the area than are leaving which will continue to add to the housing crunch for buyers and renters. Interest rates are expected to rise this year but fixed rate mortgages aren’t expected to exceed 5% – still very attractive and affordable for buyers. Area housing prices are predicted to continue to increase, good news for sellers, but at a more modest level than last year. Depending on which forecast you read, area housing prices will increase in the range of 4.5% to 6% this year.
Home values will continue to rise but at a more typical and sustainable pace than the last few years. Its likely demand will still exceed supply but with more households returning to positions of positive equity, more homeowners may finally have the ability to make plans to move up, downsize or relocate, improving inventory levels.
Is this year the perfect time to sell or buy a home? Demand for housing is high and we’re in a very strong sellers market – interest rates are low which benefits buyers and investors. Rents are skyrocketing; if you’ve been thinking about buying this would be an excellent time to purchase your first home and begin to build equity for yourself rather than your landlord. This could also be the time to maximize your equity position and buy a larger home, an investment property, downsize or think about a second or vacation home. How long will low interest rates last and property values continue to increase? That’s the sixty-four thousand dollar question. Major changes to the market aren’t anticipated, so its a safe bet that getting into a home now will result in increasing equity and a solid investment.