The real estate market is poised to make a monumental jump again – just like in 2017. 2019 turned in some astonishing numbers. We witnessed median homes prices in south Snohomish County drop and stall then climb back again. There was a monster increase in condominium prices, a decrease in sales during the summer and a burst of homes sales to close out the year.
In the last seven days in all of Snohomish county 333 sales were turned in and just 80 new listings to hit the market. The most dramatic impact has been in north Snohomish County. Housing inventory has dropped below one month.
In 2017 homeowners watched their home appreciate at a record pace. Home buyers had to fight tooth and nail to get a home. I’m going to review three predictors that demonstrate that we are in for a fun and furious real estate market in 2020 that will mirror 2017.
•First, Snohomish County’s jobless rate hasn’t been this low since 1999. The employment rate is around 3.8%, which is right in line with the rest of the nation. When there is a sense of job security home buyers feel more confident and are willing to make the jump into home ownership. They may not like the high prices but after a few years of home ownership they will be in a good equity position.
•Second, the Federal Reserve cut mortgage interest rates after their December meeting and word has it that they plan to announce another cut after their Jan 28-29 meeting. That creates the perfect climate for would-be home buyers to take a look at getting out of rental leases early to save thousands of dollars. The cost to borrow money plays a huge roll for smart home buyers at every level of home ownership. This is a perfect scenario for both buyers and sellers. Home buyers will be able to take advantage of historic low interest rates and home sellers will benefit from historically low inventory.
•Third, we all realize that this is an election year, which means there’s going to be a rush to get something closed and settled before November. You may believe the economic sky is falling so you better sell now while prices are still high or buy now before the interest rates increase. Some could believe that the economy is surging forward and will continue so you better buy while prices are still low and take advantage of great interest rates before inventory really drops and prices go way up.
My opinion is that we are in for a record year for home appreciation compared with last year. We are stepping into 2020 with low housing inventory and hungry buyers. In 2020 we will see huge price increases, making sellers very happy. Home buyers will be happy and sad at the same time – happy about low interest rates and frustrated shopping for a home in low inventory.
Todd Fahlman, owner of Realty ONE Group Orca, writes a monthly real estate column for this newspaper.
