Recently we had our first rate hike in almost a decade, and rest assured they will continue to slowly increase over the next year. This is actually good news!
Housing is back, our economy is back, and jobs are on the rise. The reality is that interest rate hikes impact regions differently across the country. How will this increase affect the Puget Sound Region?
1. Slower Real Estate Growth
Finally, a slightly more balanced market where buyers and sellers can work together, rather than the scale being unfairly tipped towards one side. Buyers, do not get too excited, because demand is still strong, and there will only be a slight slowdown. Housing values will not decrease, but the historic rapid increases are due to drop-off.
2. Local Economy
While we will see appropriate market adjustments, our thriving local economy and increased population growth can support future rate increases. We have strong local companies, and it seems like everyone from around the world is learning about how wonderful it is to live in Washington State. Lastly, banks will now profit from interest rates going up as the margins have been very slim in the past. All in all, the slowdown will be slight, and it will take some time throughout the year. Bottom line is that Washington State is well insulated from any kind of crash in the foreseeable future!
3. Local MLS News And Statistics
Compared to a year ago, MLS figures show drops in the number of new listings added to inventory during November (down 4.6 percent) as well in the total number of active listings at month-end (down 26.5 percent). We had the driest inventory we have seen in any December!
MLS Realtors reported 7,511 pending sales during November for a 10 percent increase from a year ago when they notched 6,821 mutually accepted offers. This simply displays that people are scooping up properties faster than they are available for sale.
In King County, the median price for home sales that closed during November was $499,950, a jump of 13.6 percent from the year-ago figure of $440,000.
The housing market is not going anywhere anytime soon, and there will not be a big crash like we have seen in the past. But if I were a buyer looking in this market, I would try to act sooner than later so you're not paying a premium and a higher interest rate.
Happy House Hunting!
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