Real Estate Trends for 2013 and a Forecast for 2014
| January 22, 2014
2013 Real Estate from the Rear View Mirror:
- HOME PRICES UP ACROSS THE BOARD: Seattle Area Home Prices increased by 13.2% (According to Case/Shiller)
– King County Median Home Price increased to $414,000 (2011 average was $340,000)
– This was the largest increase since 2006
- RENTS UP: For current renters: Rents increased by 6.5% in King and Snohomish Counties in 2013 (according to Apartment Insights Washington). As rents continue to increase, it makes more and more sense to buy a home!
- HOME INVENTORY DOWN: (available homes for sale) Inventory was the lowest in over a decade in 2013 but showed signs of increasing toward the end of the year
– 75% of offers submitted by agents faced competitive offers in April 2013 (according to Redfin)
– 43% of offers submitted by agents faced competitive offers in November 2013 (according to Redfin)
- INTEREST RATES UP: Rates Increased Across the board but are still low by historical standards
– January 2013 Average 30 year fixed rate was 3.41% (according to Freddie Mac)
– November 2013 Average 30 year fixed rate was 4.26% (according to Freddie Mac)
Predictions for 2014
- HOME PRICES PROJECTED TO CONTINUE TO RISE: Home prices will continue to rise but possibly not past double digits like 2013. However, some predict higher increases if Everett lands the 777 and/or our Technology sector continues to grow & hire.
- RENTS PROJECTED TO CONTINUE TO RISE: Probably not as much of an increase as 2013, as more first time homebuyers should be entering the market, as inventories are projected to improve and rates increase. As rents continue to increase, it makes more and more sense to buy a home!
- HOME INVENTORY PROJECTED TO IMPROVE SLOWLY: We predict inventories will increase but will still remain relatively low by historical standards. The forecast for slight increase in inventory over 2014 can be partly attributed to:
-As values increase, more homeowners that were underwater are now able to sell
– New Home Construction is generally on the rise (Seattle Metropolitan Area Permits are up 9% from January through October 2013)
- INTEREST RATES PROJECTED TO INCREASE: Rates are projected to continue to increase but remain low by historical standards.
– The Fed has begun to taper the government bond buying program as of December 2013. This is projected to continue which has an indirect upward effect on rates.
– As rates continue to increase, home affordability decreases.
– OVERALL IMPRESSIONS FOR 2014: Home affordability is still good but will worsen over the next 12+ months. If you have been on the sidelines waiting to buy or sell, 2014 will be a great year to do either!