The number of homes available for purchase in December, 2017, was exceptionally low in Snoqualmie, even by “typical” end-of-year standards. December’s inventory was down 5 percent compared with November and was down over 11 percent compared with December 2016.
There are buyers, yet there are limited properties to show them. The limited number of homes available for sale heightens competition among buyers and, as a result, we’re seeing multiple-offer situations. In spite of the low inventory, the median sale price increased to $731,000, which is a 16 percent increase from November, 2017, and an almost 19 percent increase from December, 2016.
Investors are a large contingent of the current buyer pool, yet high prices are compelling many of them to look farther away from job centers. Over the past month, brokers in my office have sold a number of multiple-unit buildings in areas where square footage is more affordable such as Kent and Puyallup. With rents at an all-time high in most of the region, investment properties virtually pay for themselves.
During December, many brokers in my office were working with sellers who wanted to list properties in the new year. This bodes well for a possible uptick in homes for sale in the first few months of 2018.
Many prospective sellers are downsizing and taking advantage of substantial equity to pay down or pay off a new, smaller home. Many are Baby Boomers with grown children who realize they do not need the extra bedrooms in their current home. With market conditions favoring sellers right now, many homeowners feel incentivized to list their home and anticipate a premium price.
Regarding last month’s federal tax reform, the impact for most buyers in the more affordable and mid-price ranges is minimal. For specific advice on how it relates to your circumstances, especially if you’re looking to buy or sell in the luxury market, I recommend consulting a tax professional.
The inventory shortage is especially severe in townhomes and condominiums. Due to high rents, many builders and developers are choosing to rent units as opposed to selling. We are hopeful that some of the recently constructed buildings, built to condominium standards, will be converted in the near future. These units would be especially appealing to millennial buyers, many of whom would be purchasing a home for the first time.
Our local real estate market is experiencing shifts that are typical for the winter market. I anticipate interest rates will go up slightly, but not to the points of negatively impacting a buyer’s decision to purchase. Sometimes a slight uptick in rates often brings a flurry of individuals with a “buy now” attitude into the market so they can lock in a lower interest rate before it goes any higher.
Due to continued job growth and the strength of the regional economy, my team and I feel 2018 will be another landmark year for real estate.