If you’re feeling antsy about the real estate market, you’re not alone. Homeowners and first time buyers interested in taking the leap have been pummeled with sometimes-conflicting, always jargon-filled, pseudo information about bubbles and value fluctuations. What the heck is actually happening with real estate? Is it up? Down? And, most importantly, how will it affect you and the financial investment in your home? There is plenty of information out there and sorting through it all can be a real challenge to the uninitiated.
So, you ask, what is going on in the Seattle market? Let’s break it down: according to the 2014 Home Price Index Report from Core Logic, most homeowners in Seattle have realized an increase in their home value – and these increases are expected to continue at least for the near term. Let’s take a quick look at some numbers: nationally there has been an impressive 12.2 percent increase in home values between March 2013 and March 2014. In Seattle, this increase has been 11.8 percent during the same period.
Now let’s drill down a little deeper to our micro Capitol Hill market. According to the Multiple Listing Service, homes in Capitol Hill had a median sale price of $360,000 in May 2013. In May 2014, the median sale price was $400,000, reflecting an 11 percent increase in a single year – slightly lower than the national and Seattle medians, but still pretty darn good.
What’s driving these price increases? Nationally, the answer varies – but in Seattle, and certainly in Capitol Hill where homes often turn over less frequently than other areas of the city, the simple answer can be found in a basic principle of economics – supply and demand. There are simply fewer homes on the market (supply) than there are buyers seeking homes (demand). A well-maintained, average home on the market in Seattle can expect to receive multiple offers and may well secure a final sales price that exceeds the price the home was listed for.
If you are a homeowner who has struggled to gain equity in your home during the recession, you may be able to breathe a bit easier as market stability increases and buyer and seller confidence levels continue to grow. Projecting to the near term, you can reasonably expect for prices to continue to increase through the end of the year due to short supply of listed homes in the city – however, as homeowners seek to take advantage of earned equity by selling their homes (increasing supply), we can expect prices across the Puget Sound region to moderate over the next year. This speculation is expected to hold true in the Capitol Hill market as well.
On Capitol Hill, the average time on the market is only 69 days from list to close – there is still time to prepare your home for sale, and list your home to take advantage of your increased equity. If you’re planning to stay put for the long term, the good news is that the housing market is still gaining momentum and no current indicators point to any reason for concern of any major decline in values.
For buyers, the news may feel a bit more discouraging but it’s not all bad news by far. Yes, affordable single family homes on Capitol Hill are not easy to find and competition is heavy for purchasers. At the same time, interest rates are still low and there are some great homes at great prices out there – a good realtor can be a tremendous asset in finding the right place at the right price and helping you to negotiate the best possible offer, increasing your odds of acceptance.
Overall, the news is good and all projections point to continued periods of growth in the short term and market stability in the long term. Capitol Hill homeowners can breathe easier knowing that their neighborhood is in high demand among buyers, and buyers can be assured that their investment is likely to maintain its value and see growth.