King County, Seattle, and Bellevue Real Estate Blog

Good news for home buyers and current homeowners still looking to refinance... interest rates have hit their lowest level of 2010.  The average interest rate on 30 year fixed rate home loans dropped to 4.93%.

There has been a lot of talk and speculation that interest rates would eventually rise this year as the federal reserve has hinted at.  However, the financial turmoil in Greece and the spreading fears throughout Europe has strengthened the U.S. Dollar.  Additionally, U.S. Securities are getting a more optimistic outlook compared to European Debt which is now being seen as riskier.

Although the Fed is taking fewer steps to keep interest rates low, interest rates have remained low thanks in large part to the success of the U.S. Dollar and U.S. Securities.

http://seattletimes.nwsource.com/html/businesstechnology/2011855239_apusmortgagerates.html

New home sales in April continued to increase nationally, no doubt thanks in part to first time homebuyers getting in on the 8k tax credit.  New single family home sales rose 14.8% in April, which followed a record setting increase of 29.8% in March. Locally, from March to April King County new construction sales of single family and condos dipped about 10%, but pending sales jumped about 15%.

There's a lot of ways to try to interpret these numbers, but more than anything else a couple things jump out at me.

First, the tax credit did what it was supposed to do and stimulated the economy. Obviously real estate agents, loan officers, banks, inspectors, appraisers, etc etc, benefited from the tax credit.  Going deeper these stats show that builders benefited, which extends into manufacturing, goods, carpenters, plumbers, electricians, etc, etc.

Second, I've personally seen a lot of buyers taking advantage of historically low rates and low prices to do exactly what this stat suggests... buy a NEW home.  That's outstanding for buyers!

I've mentioned it before and I'll reiterate that first time buyers did play a large role in getting the ball moving in the right direction for housing, but they're not the only ones responsible.  Move up buyers, who have increasingly gained confidence in the recovering economy are also taking advantage of low rates and prices.  This is what many of us in and outside of the industry think and hope will help sustain the recovery.

Washington added 5,800 jobs in April dropping the state's unemployment rate to 9.2 percent, well below the nationwide average of 9.9 percent.  Better yet, April was the third month out of the last four that more jobs were added.

Unemployment also dropped in the Seattle Metropolitan area to 8.5 percent in April, down from 8.6 percent in March.

It's nice to see a positive trend developing which bodes well for the housing industry, however foreclosure activity will likely stymie a fast recovery. Why?  April's national jobs report noted that 6.7 million people (nearly half of all unemployed) have been jobless for over 26 weeks.  This is largely where the notion that a slower recovery is much more likely, as extended joblessness will lead to continued foreclosure activity.

As I've said before, some neighborhoods and cities are faring much better than others and have actually begun appreciating.  Many neighborhoods in Seattle are good examples, where jobless numbers are better than outlying areas.  In other areas that are still rounding the corner on the track to recovery, foreclosure activity has weighed negatively on the housing statistics.  Foreclosed and pre-foreclosed homes sell at prices below fair market value which has a dramatic effect on overall housing numbers.

So what does this mean for all you buyers out there? It means it is important to be well informed about the area you are interested buying a home in, which we can help you with.  Being informed will help you choose a home that is more likely to have not only a long term positive outcome, but also short term success while our economy pulls itself out of the rescession.

At the end of the day, I'm just happy to see a positive jobs trend developing.

Housing statistics for the month of April just released by the Northwest Multiple Listing Service show a huge turnaround in Washington and King County real estate trends, activity, and inventory. This Seattle Times Article covers some of the numbers which I recommend reading, but what I want to focus on is the increasing positive outlook from industry professionals.

For a while, many Seattle and Bellevue real estate brokers and financing professionals I interact with had plenty of speculation over what would happen after the first time buyer tax credit deadline passed on April 30th. Admittedly, I was in that same boat.

There was definitely a strong showing from first time buyers as the deadline loomed, but stats are now showing rising consumer confidence may help ease the burden of the expiring tax credit. The reason behind this is a steady rise of move up buyers that resulted in an uptick in mid level priced homes as well as upper end homes.

OB Jacobi, a board member of the Northwest Multiple Listing Service described the tax incentives as the "lubricant the market needed," but credits rising consumer confidence as "driving the engine now."

Further, in the latest NWMLS News Release, Chairmen and CEO of John L. Scott Real Estate, J. Lennox Scott was quoted as saying “the home buyer tax credit did what it was designed to do; it helped with stabilizing the housing market which in turn helped stimulate economic recovery.”

Another positive note is that total inventory of homes for sale is on par with the same period last year, while pending sales have jumped 36.4% during the same period. When the real estate bubble really burst, a surplus of inventory drove sellers to dramatically drop prices to entice buyers. We are now seeing more of a healthy market where homes are selling with relative speed when priced appropriately. If you price it right, the buyer will come.

Ultimately, many areas and neighborhoods have seen prices stabilize and appreciate over the last 6-12 months, and sellers who price their homes appropriately are enjoying successful sales. Meanwhile, there are still some areas that continue to be negatively impacted by foreclosure activity. I don’t expect a dramatic and fast recovery, but I do expect to see continued recovery as consumer confidence continues to rise and foreclosure activity eventually dwindles.

Would you like us to dig up real estate information and statistics about the neighborhood you live in or a neighborhood you would like to move to or invest in? All you have to do is ask... just go to our Contact Us page and fill out the "Got a Question" form.