To keep these charts reasonable, I used King County as an indicator of broader trends in the region. If you are interested in statistics from another area, send me a note and I’m happy to put that together for you. In June of 2021, there were 1,456 homes for sale in King County. The number has increased over 76% to 3,256 homes for sale in June of 2022.

At the same time, fewer transactions are closing. In June of 2021, 3194 transactions closed and in June of 2022, 2482 transactions closed.

One would normally expect with increased inventory and decreased demand that you would begin to see downward pressure on pricing. While I believe that is coming, we haven’t quite seen it yet. The median home value has increased 9.1% across all of King County from June of 2021 to June of 2022.

I believe the market will continue to degrade for sellers. So, if you are thinking about selling your home now maybe your best opportunity. On the other hand, if you are thinking about moving you finally have some leverage and may not be competing against 15 other families for the home of your dreams.
Let me know if I can help you in your home search or sale, I’m happy to.

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The post Seller’s market cooling down appeared first on Tim Ritchie Homes.

What does a cooling housing market feel like? What should you and your clients be on the lookout for when judging whether the price and demand of homes is leveling off?

Every local market is unique, but wherever you are, there are four indicators about whether your housing market is cooling or remaining ultra-competitive:

1. Reduced prices for local listings
2. Fewer mortgage applications
3. More homes on the market
4. Lighter attendance at home tours and showings

1. Reduced Prices for Local Home Listings

The first indication that your local housing market could be cooling is if you and your clients notice lower prices for local homes listings.

Low borrowing costs meant to cushion the effects of the COVID-19 pandemic rose housing prices by 35% in the past two years. Now, with the Federal Reserve raising interest rates to fight decades-high inflation, consumers in your market may be willing to pay less for homes, driving down the price.

Beyond simply lower home prices, look closely at whether a trend of reductions in price develops. If sellers are routinely marking down the price of homes already on the market, it’s an indication that your market is cooling and becoming more buyer-friendly. 

2. Fewer Mortgage Applications

Before buyers purchase a home, they have to apply for a mortgage. So, one indicator about the housing market’s competitiveness comes from the number of mortgage applications.

Overall, mortgage applications dropped 8.3% in the last week of April. This decline in mortgage applications may reflect a general softening in buyer demand homes. But a lower number of mortgage applications may also derive from a limited number of homes on the market.

Either way, keep an eye on the number of mortgage applications in your market. If mortgage applications are tumbling, the housing market may be tapering. If mortgage applications in your market maintain or even increase, your local market is likely still red-hot.

3. More Homes on the Market

If there’s one situation homebuyers and their agents are likely to have experienced in recent attempts to purchase a property, it’s a lack of homes on the market.

Indeed, home listings are at a record-low, and even with rising mortgage rates and sky-high home prices, a limited inventory of available properties has kept the real estate market competitive.

If you notice a wider available inventory of properties, the housing market may finally be cooling. More available homes would tamp down bidding wars and perhaps compel sellers to list their homes at lower prices.

Of course, there is typically an influx of listed properties in the spring and summer – so keep a close watch on how long those listings stay on the market, and whether the price they sell for is higher or lower than the initial ask.

4. Lighter Attendance at Home Tours and Showings

It’s important to crunch numbers and monitor trends. But as an agent exposed to the local markets, I have the ability to gauge the current state of your local market.

In particular, I’m watching attendance at local home tours and showings. In the last few weeks, things have slowed significantly from where it was in February, or even last summer. People are making less aggressive, cash-heavy offers to purchase homes, homes are selling closer to list price, and they are staying on the market longer.

In my opinion, we are in a cooling market that is going to continue to cool off in the coming weeks and months.

The post Is the market cooling? appeared first on Tim Ritchie Homes.

But let’s play devil’s advocate and assume we experience a 2008-style housing crash. If it does, the market will come back over time and home values in the Pacific Northwest will resume their climb. Here’s a chart of Pacific Northwest home values since 2008:

But maybe we just got lucky? Nope. This has happened before. See this chart from the mid-1970s to early 1990s.

Housing is a cycle. We have just experienced the top of our current cycle, which was fueled by historically low interest rates, which are now being right-sized. The fundamentals of the Puget Sound housing market remain strong. We have low unemployment, thousands of new high wage jobs moving into the area, and limited housing stock that is constrained by the Mountains and Puget Sound.

If you’re looking to draw a parallel, look to the Bay area, which has many of the same geographic constraints and has experienced the same type of explosive job growth. They are a decade or so ahead of the Puget Sound, but provide an excellent model of what is likely to come.

This is all good news if you’re a buyer. Housing prices have stabilized and inventory is more abundant, which means you won’t have to compete with five other families to buy something. You probably missed the top of the market if you are selling in the near term. However, if you put things in a historical context, this remains an incredible market to sell.

Contact me if I can help you make sense of the market, or if you need help buying or selling.

The post Are we heading for a housing crash? appeared first on Tim Ritchie Homes.

Woodinville, Washington is the most popular market on all of Zillow so far this year. Edmonds also had a reasonable showing, coming in at #5 on the list. This is largely driven by the trend to work at home, eliminating the need to commute and enticing buyers to prioritize larger homes and suburban lifestyle over short commute. Over the last year suburban home values have increased 20% on average, whereas middle tier priced homes in Woodinville have increased more than 37% year over year and are now selling for an average of $1.4 million.

If you have a home in Woodinville and are looking to sell, contact me and let’s get that thing sold! I’m happy to provide a no-obligation comparative market analysis to give you an idea of what your home is worth in this market. If you are looking to buy a home in Woodinville, I know a good banker that can help.

The post Woodinville Tops Zillow’s Most Popular Market appeared first on Tim Ritchie Homes.

Average interest rates for a 30 year fixed loan have more than doubled over the last couple of months and are now above 5.25%, the highest rates since 2009. This has had a chilling effect on home sales, leading to more home staying on the market longer, which may be good news for buyers. Of course, that needs to be weighed against higher interest rates, which reduces buyers purchasing power.

Buyers, I wouldn’t say that we are in a buyer’s market quite yet, but interest rates aside, we are trending that direction. If you have been sitting on the fence, now may be a good time to begin your home search.

Sellers, your window of opportunity to capitalize on this historic housing market is rapidly closing. If you’re thinking about selling, now is the time to get on the market.

Please give me a call if you need help finding the right home or if you would like to explore selling. I’d be happy to help you.

The post Market in transition appeared first on Tim Ritchie Homes.

Buyers: Get your offers in and your loans locked as soon as possible before the full impact of these rate increases flow through the system. I can help with referrals to fantastic mortgage brokers.

Sellers: There will be no better time to list your house than yesterday. Interest rates are climbing, reducing buyer’s purchasing power, and more homes are coming on the market due to the spring listing cycle. I can help you prepare your house for sale and get it listed for a quick sale.

Contact me if I can help you win the home of your dreams or sell your home in this optimal environment.

The post 73% Chance of rate increase appeared first on Tim Ritchie Homes.

A new report out from the Northwest MLS (NWMLS) shows a 7.4% year-over-year drop in pending sales. Many brokers suggest this decline is a reflection of limited supply, and not yet a reflection of reduced demand. In March, there were 10,059 pending sales, down just a bit year over year, but an increase of 31% from February.

Home prices are up dramatically compared to 2021 across the region, some as high as Grays Harbor County with a 25% increase over last year. However, some of that pricing pressure is beginning to dissipate with more sellers making downward pricing adjustments. For now, multiple offers are still the rule.

There is seasonality to the Puget Sound real estate market, with more homes listed in spring and early summer. This is great news for buyers that have been pent up or priced out of the market. There were 11,197 new listings in March, up from 10,562 a year ago and a 41% increase versus February. It was also the highest volume of new listings during a month since September 2021.

If you are looking to sell your home, now is a great time to do that before increasing interest rates cool the market too much. If you are looking to buy a home, now is a great time to do that, too, as inventory increases and more homes are staying on the market longer.

Contact me if I can help you buy or sell a home.

The post April Market Update appeared first on Tim Ritchie Homes.

As the buyer, once you have reached agreement on the purchase of a new home you and your team will be responsible for much of the activity. Either the listing agent or your agent will open an escrow account. The escrow and title company is most often dictated by the seller’s side at listing time.

If you included an inspection contingency, you should contact a qualified home inspector to conduct a walkthrough inside and out. If needed, pest inspections are handled separately. A good home inspector will recommend a pest inspection if they see evidence that it’s needed. If any issues are identified, you will have an opportunity to require the sellers to address the issues or renegotiate the purchase offer. If you don’t already know a home inspector, contact me and I can refer one.

Hopefully you have already been pre-approved for a mortgage. If you have not been, now is the time to complete your mortgage application. I work with a number of lenders and I’m happy to refer you to someone if it’s helpful. The next step will be for the lender to send out an appraiser. The goal is for the appraiser to value the home for at least as much as your agreed purchase price. If the appraisal is low, you may be able to renegotiate the price with the seller or you may need to come up with additional cash to make up the difference. If you included a financing contingency, you will likely be able to cancel the purchase at no penalty based on the low appraisal if necessary.

Title insurance is likely to be provided by the title company identified in the transaction. However, you can use a third-party title company for title insurance. For simplicity most do not.

Once your loan is approved, you are almost at the finish line. The escrow or title agent should send you a formal notice of the closing date and time. This will include a breakdown of costs and what you need to bring to the closing meeting.

The final step for you is to sign the papers. The documents are likely to be 100 pages or more. Make sure to verify the interest rate and the type of loan are what you expect. An attorney can help you interpret finer points of the documents if you are concerned.

Once all parties have signed, the loan will be funded and the escrow company will file necessary documents with the county.

Then, the hard work of moving and unpacking can begin!

Contact me if I can help you navigate the home buying (or selling) process.

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