How did the numbers for the NWMLS stack up during 2015? Local real estate brokers were busy!

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Real Estate

Brokers within the Northwest Multiple Listing Service (NWMLS) area were *busy* during 2015 (all 23,800 of them, working within 23 Washington State counties!). Closed sales NWMLS-wide surpassed the pre-recession volume levels of 2007. Measured in dollars, single family residences and condo sales topped $34+ billion. That equates to sales of 75,975 single family homes and 12,356 condos last year. Wow!

Appreciateion Map revisedGrowth in Seattle area home prices during 2015 repeatedly made national news. This image above outlines how much growth the NWMLS areas in the Puget Sound region experienced last year in the single family residence market, with each area seeing increases in median home prices year-over-year. The neighborhoods with the largest single family increases are Bellevue – West of 405(22.7%), Beacon Hill (17%) and Shoreline (15.5%), while 11 of the neighborhoods in the Puget Sound region experienced over 10% growth in median prices in 2015. Well priced, desirable homes flew off the market, which contributed to these increases, with the droves of tech and STEM workers who relocated to greater Seattle.

Luxury sales NWMLS-wide surged last year, with the sale of 2,676 single family homes and 237 condos priced at $1million or more. The high end home market in the greater Seattle area experienced noteworthy activity, where 34 homes sold at $5+ million dollars during 2015 (compared to 31 homes in 2014). 2/3 of those sales were all cash! The international buyer extensively made high end home purchases in the Puget Sound area, making up 39% of high end buyers. Which cities had the most high-end sales during 2015? That would be Mercer Island and Bellevue, they both had 7 home sales priced over $5 million dollars. In fact, the city of Mercer Island was home to the highest priced sale in the NWMLS last year ($13.8 million).

2016 is shaping up to bring more home price growth to our region. Zillow projects a 5.4% growth in Seattle housing prices this year, placing it in the number 2 spot on their list of hottest markets in the U.S. Zillow Chief Economist Svenja Gudell said in a statement, “… this year, the markets that shine brightest will be those that manage to strike a good balance between strong income growth, low unemployment and solid home value appreciation.” There have been questions about affordability for Seattle buyers, but our income is also slated to grow by 1.1% – that solidly places our area second on the national income growth list Zillow compiled.

How about the luxury market? Will it fare as well in 2016? Zillow is speculating a cooling in higher priced residential real estate. Windermere Real Estate president, OB Jacobi, has something different to say about this real estate sector, “With so many companies hiring, and no one wanting to leave, we expect the trends of 2015 to carry on through 2016.”

Photo credit: Windermere Mercer Island, compiled with statistics from provided by the NWMLS

Open Houses: Friday February 5 – Sunday February 7, 2016

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Real Estate

Give From the Heart 2016On Wednesday February 10th is the annual Giving From The Heart breakfast to benefit Mercer Island Youth and Family Services. If you are not able to make it to the breakfast that morning, 15 island businesses have joined the Giving From The Heart Business Partner Program and will be donating 20% of their February 10 sales to MIYFS. If make a purchase on February 10th at any of the partners listed below your sale will help support the services provided by MIYFS:
All the Best Pet Care, 3037 78th Ave SE
Au Courant | The Den | POSH, 7900 SE 28th Street, #100
AutoSpa, 2730 80th Ave SE
C.michele interior lifestyles, 7605 SE 27th St, Suite 102
Clarke & Clarke, Art + Artifacts, 7605 SE 27th Street
David Weed Orthodontics, 2955 80th Ave SE, Suite 100
Freshy’s Market, 2411 76th Ave SE
Island Books, 3014 78th Ave SE
Island Treats, Pop-Up Shop at Freshy’s, Feb 10 only!
Mercer Island Athletic Club, 2630 77th Ave SE
Mercer Island Florist, 3006 78th Ave SE
Pete’s South Mercer Chevron, 8407 SE 68th Street
Phat 12 Island Broiler, 2707 78th Ave SE
Studio 904, 3041 78th Ave SE
Yoga Bliss, 7803 SE 27th Street, #174

Brokers from Windermere Mercer Island will be at the breakfast on Wednesday. Hope to see you there!

Looking for a new home? Several new listings represented by our brokers hit the market this week and are being held open over the weekend. It’s a convenient opportunity to preview these homes. Details are below by city.

Have a wonderful weekend!

Bellevue
$335,000 ◊ 891359 ◊ 14703 NE 35th St #33Look BookJay Agoado ◊ Saturday February 6, 1-4pm

Mercer Island
$1,100,000 ◊ 890511 ◊ 7000 80th Ave SEVideo TourMarianne Parks, Saturday February 6, 12-3pm ◊ hosted by Kathryn Lerner Friday February 5, 2:30-4:30pm & Sunday February 7, 1-4pm

$1,199,500 ◊ 885056 ◊ 4515 Ferncroft RdVideo TourDonovan Realty Group ◊ Saturday February 6, 1-4pm

Windermere Real Estate Eastside Kick Off For 2016

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Real Estate

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Windermere Mercer Island *brokers recently joined their peers from all the Windermere Eastside offices to prep for 2016. Five knowledgeable and dynamic speakers took the stage to inform us about the economic conditions of our region, update us on recent changes to real estate law, and inspire us to be the best brokers we can be (while having fun along the way!).

Economic Update – Windermere Chief Economist, Matthew Gardner, and Skylar Olson, from Zillow, discussed the economic outlook for our region. And it looks pretty darn good. They started off tackling talk of a housing bubble – no to any bubbles nationally, or locally, at this time. Home values in the Puget Sound Region will continue to grow, but are projected to increase at a slower pace than 2015. The employment outlook for our area is decent, although Matthew Gardner mentioned the need for job diversification within the Seattle area. Wage discrepancy could become more of an issue and affect a buyer’s ability to make a home purchase. Interest rate increases will be modest during 2016 and Mr. Gardner indicated that local income growth should be able to absorb any increases this year. It is a good time to buy now, especially with our expensive rental market. In fact, Skylar Olson pointed out that right now Seattle buyers only need to stay in the home for 2 years for the purchase to make the purchase a solid financial choice. But saving for that down-payment is a struggle for renting millennials. And our increasing rents here are being driven by our local economy’s wage growth, so moving from renting to buying is definitely a process to contend with.

Legal Update – Lars Neste, of Demco Law Firm, and Justin Hagg, from the NWMLS, covered recent changes to real estate law, went into more details about transaction forms that often generate questions, and touched on the subject of rental caps in condo communities. They helped us gather necessary information to better serve you during your transactions.

Keynote Speaker – Author Ron Culberson kept us in stitches as he illustrated Do It Well, Do It Fun as a noteworthy business practice to reduce stress and avoid burn out. We learned valuable stress management skills, how important empathy is to effective communication, and to examine what drains you to see how you can change your processes to be more productive without sacrificing balance in your life. Mr. Culberson also shared that there is power behind telling a story. Effectively telling a story is something we strive to do because our clients’ stories become entwined with our stories as we build a relationship together. Check out #YourStoryIsOurStory for more details.

We’re so appreciative of all the broker support we receive from Windermere Real Estate, so we can better serve you with the most important transaction you will ever make – the buying or selling of your home. We’re excited for the opportunities ahead during 2016!

 

*Windermere Mercer Island brokers who attended the 2016 Windermere Eastside Kick Off Event: Julie Barrows, Jay Agoado, Lara Baca, Ina Bahner, Melissa Boucher, Lis Brown, Kathryn Buchanan, Wendy Chan, Denise Coe, Nicole Demers-Changelo, Chad Dierickx, Lisa Dong, Erin Ewing, Tom Fine, Fred Fox, Andrew Jackson, Jake Kanev, Cherrie Lee, Kathryn Lerner, Jane Malone, Dan Marinello, Doug McKiernan, Marianne Parks, Molly Neary, Emily Roberts, Seamus Pelan, Brian Rosso, Bonnie Sanborn, Peni Schwartz, Peni Schwartz, Alejandro Vega, Kelly Weisfield, Julie Wilson, Anni Zilz

 

 

Cost VS Value: Small Kitchen Remodels Offer A Nice Return In Seattle

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Homeowner Tips / Houzz / Real Estate

The results of the Remodeling 2016 Cost VS Value Report are in! Here in the Seattle area one of the home maintenance tasks that topped the list is a minor kitchen remodel (came in at 104% ROI within the Seattle area). If you have been contemplating small updates to your kitchen, 2016 is a good year to tackle this project. But where to start? Houzz shares some great stories that may be of assistance.

What kind of kitchen style are you attracted to? What aesthetic would fit your home’s style? Check 12 Great Kitchen Styles – Which One Is For You? for ideas. Within the article are links to more comprehensive guides for all 12 styles featured, to get you thinking how to achieve the look you are drawn to.

 

Are you interested in updating your countertops but are undecided about what material you should use? Check out Your Guide To 15 Popular Kitchen Countertop Materials to get a quick synopsis for each material covered, links to pro and con guides for each of them, and the average cost per square foot.

 

It does not matter the size of the home project, it needs a plan to get it off the ground and reach completion.  Check out Homeowner’s Workbook: How To Remodel Your Kitchen  for 9 steps that will guide you through your minor kitchen remodel from start to finish!  

 

2015 Year In Review Reports For Mercer Island, Seattle and the Eastside

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Business Climate / Real Estate / Waterfront Report

Windermere Mercer Island’s 2015 year in review reports are hot off the press and ready for you to check out.  Local real estate featured a strong seller’s market during 2015 and robust median price growth. Interest rates remained low throughout the year, fueling demand in an already popular housing market.

See what is happening in your neighborhood on Mercer Island, the greater Eastside or city of Seattle.

Mercer Island

Eastside

Seattle

If you have an interest in our local waterfront real estate market, check out the 2015 Waterfront Year End Report covering waterfront property sales on on Mercer Island, Seattle, the Eastside and Lake Sammamish.

The local condo market’s performance during 2015 is examined in the annual Condo Report covering greater Seattle and the Eastside.

Matthew Gardner’s 2016 Economic & Housing Forecast

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Business Climate / Real Estate

image licensed under 1 time use license by Canva Originally published on Windermere Blog by Matthew Gardner, Chief Economist, Windermere Real Estate

The National Economic Forecast

1.The U.S. will continue to expand with real GDP growth of 2.3% in 2016.

Although a positive number, the forecasted rate of growth suggests that we will be modestly underperforming in 2016. On a positive note, oil prices are likely to remain well below long-term averages, which puts more money into consumers’ pockets in terms of disposable incomes. However, I believe that consumers are likely to continue to save rather than spend which will constrain growth. That said, there is certainly no recession on the horizon – at least not yet – and a strong dollar will act as a bit of an anchor.

2.Employment will continue to expand but the rate of growth will slow. Look for an increase of 1.6% in 2016.

We are rapidly approaching full employment (generally considered to be when the unemployment rate drops below 5 percent). As such, growth in employment has to be driven more by population growth rather than a return to employment. 2015 saw an average of around 210,000 jobs created per month and I believe that this is likely to slow to an average monthly gain of 190,000 new jobs.

3.The U.S. unemployment rate will continue to drop and end 2016 at 4.8%.

As mentioned above, we are heading toward full employment and, as such, the national unemployment rate cannot trend much lower. That said, the less acknowledged U-6 rate (which includes those working part-time and those marginally attached to the workforce) will remain elevated at around 8%, signifying that there is still some slack in the economy and room for the rate to drop a little further.

4.Inflation will remain in check with the Consumer Price Index at 1.9%.

The Federal Reserve has begun the long-awaited tightening of monetary policy and we will likely see the Fed Funds Rate continue to move higher over the next two years. Inflation has yet to respond to the low unemployment rate, but it will.

The core rate of inflation should remain in check and the overall rate could stay below long-term averages as a function of stubbornly low energy costs. Should we see a shift in OPEC’s position relative to oil supply, the overall rate of inflation could rise more rapidly. Oil prices, therefore, will remain in focus during 2016.

The National Housing Market Forecast

5.Mortgage rates will rise, but we will still end 2016 with the average 30-year fixed rate below 5%.

I am taking the Fed at its word when it says that monetary tightening in 2016 will be gradual and heavily data dependent. Accordingly, I expect only a modest uptick in long-term rates in 2016. Furthermore, as long as the Federal Reserve continues to reinvest the dividends that it is receiving from their bond holdings – which is highly likely – the yield on the key 10-year treasury will remain low and hold mortgage rates in check. This is only likely to change after the general election, therefore suggesting that rates will remain very attractive relative to their long-term averages.

6.Credit Quality – which had been remarkably stringent – will relax a little.

Access to credit, specifically mortgage instruments, has not been easy for many would-be homebuyers but that is set to change. I believe that we will see some improvement, specifically for borrowers with “near-prime” credit. This will be of some assistance to first-time buyers; however, credit quality will still be higher than it needs to be.

7.Existing home sales will rise modestly to an annual rate of 5.53 million units with existing home prices up by 4.7%.

I anticipate that we will see some improvement in overall transactional velocities in 2016, but unfortunately, demand will still exceed supply. Prices will continue to rise, but at a more constrained pace than seen over the past few years. This will be a function of modestly rising interest rates as well as slightly improving levels of inventory. I anticipate that we will see more listings come online as more households return to positions of positive equity in their homes.

8.New home sales will jump and be one of the biggest stories for 2016. Look for a 23% increase in sales and prices rising by 3.4%.

I believe that builders will start to build to the entry-level buyer, filling a huge void. Additionally, I see the total number of new home starts increase quite dramatically in 2016 as banks start to ease lending and builders start to believe that the downward trend in homeownership has come to an end. This will help to absorb some of the pent-up demand currently in the market.

9.Foreclosures will continue to trend down to “pre-bubble” averages.

Any story regarding foreclosures will be a non-story as the rate will continue to trend down toward historic averages. However, we will see the occasional uptick as banks work their way through their existing inventory of foreclosed homes. Move along. There’s nothing to see here.

10.The Millennials will start to enter the market.

There are several substantial reasons to expect an increase in Millennial buyers. Firstly, early Millennials are getting older and starting to settle down, and even with modestly higher mortgage rates, rents are likely to continue to trend upward, and this will pull many into homeownership.

Secondly, more favorable mortgage insurance premiums, additional supply from downsizing boomers, and growing confidence in the housing market will lead to palpable growth in demand from this important – and substantial – demographic.

To conclude, it appears to me that 2016 will be a year of few surprises – at least until the general election! Because it is an election year, I do not expect to see any significant governmental moves that would have major impacts on the U.S. economy or the housing market.

content_MGardnerPhoto_bw_Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.

NWMLS Press Release, January 6, 2016: Puget Sound area home sales, prices still strong. Backlog of buyers compete for scarce inventory

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NWMLS Press Release

NWMLS press release photoRising home prices and depleted inventory are again the major topics of the Northwest Multiple Listing Service(NWMLS) January 2016 press release. During the month of December, the median home price in King County sprung up to surpass pre-recession levels, ringing in the New Year at $508,000. OB Jacobi, president of Windermere Real Estate, said the following about this noteworthy news, “If December told us one thing, it’s that home prices have clearly recovered in King County. Last month the median price for single family homes broke the pre-recession record of $481,000 that was set in July 2007.” That is almost a 15.5% gain from November to December.

Industry leaders noted that the drop in pending sales was chiefly due to our housing market’s depleted inventory. The inventory level for the 23-county region the NWMLS serves dropped to an average of 1.8 months’ worth of supply. King County saw its inventory drop to less than a month’s supply. Brokers saw more movement of buyers who were interested in homes in urban areas expanding their searches to adjacent suburban locations, which may have more inventory and lower prices.

Closed sales ended on a strong note, with a total of 88,831 closed transactions MLS-wide for 2015 (14.3% gain year-over-year), and gave the New Year a robust foundation to build on. Home sales in 2016 are expected to continue at this harried pace, until more sellers decide to list their homes. Buyers may experience increased stress if interest rates start to rise as anticipated and may end up settling on a home to lock in their desired mortgage rate. The good news is that industry experts do not see a housing bubble on the horizon, due to stricter lending standards. And current home prices, along with a rising interest rate, may motivate more homeowners to enter the housing market to capitalize on our strong economy and the numerous eager buyers looking to make a purchase.

Below are excerpts from the January 2016 NWMLS press release. To read it in its entirety, please click here.

Home prices have “clearly recovered” in King County and a few other areas served by Northwest Multiple Listing Service. Many member-brokers say prices are likely to keep rising as a backlog of buyers competes for depleted inventory.

Those were among reactions from brokers upon reviewing the December statistics from the MLS. The latest report shows the year ended on a mostly positive note with pending sales, closed sales and prices all showing year-over-year increases. Not surprisingly, listing activity dropped, in part because some sellers are balking at listing their home for fear of not finding a replacement.

Selling prices for single family homes and condominiums that sold across the Northwest MLS 23-county service area surged 8.6 percent from a year ago, rising from $290,000 to $315,000. The price of a single family home (excluding condos) that sold in King County during December jumped nearly 15.5 percent, from $440,000 to $508,000, prompting OB Jacobi, president of Windermere Real Estate to comment, “If December told us one thing, it’s that home prices have clearly recovered in King County. Last month the median price for single family homes broke the pre-recession record of $481,000 that was set in July 2007.”

MLS figures show active listings in King County were down 39 percent (about 1,400 fewer properties) from 12 months ago. Area-wide, inventory was off 29 percent from a year ago, plunging from 17,659 active listings to 12,522. That total includes 4,041 new listings the MLS brokers added during December, which was down from 4,367 the members added during the same month a year ago.

Inventory levels fell well below the threshold many industry experts use to gauge a balanced market. Area-wide there was just under 1.8 months of supply, with four-to-six months generally considered to be a “balanced” level. In King County, inventory dropped to less than one month (0.84). It was slightly better in the adjacent counties, with Snohomish at 1.13 months and Pierce at 1.76 months. Kitsap County also reported less than two months of supply. Only five of the 23 counties in the MLS report had more than six months of supply.

Pending sales system-wide, which totaled 5,970 during December, clearly outpaced the brokers’ ability to replenish inventory. The sales volume was up 3 percent from a year ago when members reported 5,794 mutually accepted offers. Measured another way, last month’s pending sales outnumbered new listings by a wide margin – a differential of 1,929 units.

[It’s] expect[ed] 2016 may be “very stressful” for some buyers, citing low inventory, increasing prices, rising interest rates, plus a growing pipeline of qualified buyers as sources of house-hunter anxiety. Other factors could also come into play to squeeze inventory…. They include buyers whose credit has been repaired after foreclosures or short sales, investors who see real estate as an alternative to the stock market, escalating rents that prompt renters to consider home ownership, and buyers from outside the U.S.

… both long-time homeowners and new homebuyers are feeling the impact of rising prices and interest rates. One consequence … is decreased buying power. … the diminished power coupled with rising prices will push buyers who are on the fence to make their move…

Some brokers say rising prices are more worrisome than upticks in interest rates.

Noting differences in the tri-county area where pending sales declined by 9.2 percent in King County but increased by double digits in both Snohomish and Pierce counties, Jacobi thinks price hikes in King County are “clearly pricing many buyers out and into the adjacent areas.”

MLS figures show wide differences in prices within the four counties in Central Puget Sound region. Pierce County had the lowest median price for December’s sales at $249,950, while King County had the highest at $450,000. Homes and condos that sold in Kitsap County last month had a median price of $266,500; in Snohomish County the median sales price was $335,500.

The median price on December’s sales increased 8.6 percent area-wide compared to a year ago. Ten counties reported double-digit gains; four counties had year-over-year decreases in median sales prices.

Condo prices increased about 6.7 percent, from $239,000 to $255,000. In King County, which accounted for about 55 percent of the sales, the median sales price was $279,975. That’s up about 7.7 percent from a year ago.
Despite rising prices in most areas, closed sales ended the year on a strong note. Brokers reported 7,091 closings during December, outgaining the total of 6,284 for the same month a year ago (an increase of 12.8 percent). For the year, Northwest MLS members logged 88,831 closed sales, up from 2014’s total of 77,276 for a 14.3 percent gain.

4 county pending sales Dec 2015

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

Mercer Island Lacrosse Christmas Tree Pickup: January 9 and 10, 2016

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Community Happening / Spirit of Mercer Island

MI Lacrosse Team christmas tree pickup
The Mercer Island Lacrosse Club is once again offering their annual Christmas tree pick-up. The $25 fee for pick up is a fundraiser that benefits the club program. To sign up(sign ups end the evening of Friday, 1/8), please click here to access the Eventbrite webpage. The scheduled pick up days are Saturday, January 9th, and Sunday, January 10th, 9am to 2pm. After signing up, put your tree out to the curb by 9 AM on the day you selected and leave the hauling to lacrosse players and their parent volunteers! This is a great way to take care of a necessary chore and help out a local youth sports organization at the same time.

King County Had Almost Half of 2015’s 30 Most Competitive Neighborhoods in America

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Uncategorized

Real estate in King County was hot, hot, hot during 2015, as we can see by this top 30 most competitive neighborhoods list (13 are located here!). The Eastside has a decent representation within these 30 neighborhoods, including Overlake (2nd), Grass Lawn(7th), Newport Hills (14th), Idylwood (28th) and Newport (30th).

Seattle Spaces & Places

We probably don’t need to tell you that 2015 was a crazy year in real estate, especially in our city. Bidding wars and listings lasting mere days on the market is something we’ve all grown accustomed to. But it turns out we’re not alone. Redfin recently came out with a list of the 30 most competitive neighborhoods from all across the U.S.. What’s the most mind blowing thing about this list? Of the 30 neighborhoods listed, 13 of them are in King County.

Top30Competitive-Neighborhoods-Table2

Seattle neighborhoods that made it onto this list are Roosevelt (4th), Phinney Ridge (9th), Stevens (11th), Greenwood (12th), Victory Heights (16th),Green Lake (17th), Madrona (20th), West Woodland (22nd). I mean, we all knew it was stormy out there, but this felt like a snow storm in Waikiki. It’s hard to say exactly what 2016 has in store, but our very own Chief Economist, Matthew Gardner, has…

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Good-Bye 2015, Hello 2016: Where Real Estate Is Headed In The New Year

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Business Climate / Real Estate

Frantzou Fleurine, UnsplashWhen we rang in the New Year for 2015, real estate pundits were sharing national trend opinions that centered on “normalcy” and “balance.”  Experts predicted slowed home value growth, which needed to occur for the housing market to level out to a more balanced point. Low inventory issues were forecast to dissipate. First time home buyers supposedly were right off stage, ready to step into the real estate limelight. New home construction was expected to pick up the slack, especially in the lowest inventory regions within the U.S.

The 2015 real estate market did not quite pan out as predicted.  It’s varied greatly, depending on what region you were trying to buy in. At about the half way mark of the year, the discussion of the potential for a housing bubble became national headlines.  Windermere Real Estate’s chief economist, Matthew Gardner, explored this topic on several occasions during the second half of 2015.  Gardner has reassured us that a housing bubble would not be forming any time soon. He did spec out the rapidly growing markets in San Jose, San Diego and San Francisco as ones to watch. Due to these cities’ exponential home price growth a “frothy” housing market  may be on the horizon in their regions, one where homes become priced outside of the budgets of buyers earning that area’s median income once mortgage rates start to rise again.

Interest rates did not rise much at all throughout 2015, even though some projections placed 30 year fixed rates nearing a high of 4.75% toward the end of 2015. In actuality, many weeks during 2015 the interest rate for 30 year fixed mortgages hovered below 4%. In December, the Federal Reserve did finally increase the Fed Funds Rate by .25%, which led to some modest speculation about the possibility of entering a rapidly rising interest rate situation. Matthew Gardner explained why we would not see those speculations come to fruition right now.    He cited what types of credit are tied to the Fed Funds Rate, which include revolving credit like credit cards or home equity loans. Mortgage interest rates are tied to 10-year treasury bond yields, which were not boosted in December.  In fact, as of Christmas Eve 2015 the 30 year FRM remained below 4% even with the recent Federal Reserve activity.

Millennials were supposedly primed to take up the first time home buyer gauntlet during 2015. However, the number of people below the age of 35 that are homeowners is still receding from levels before the Great Recession. As of the 3rd quarter during 2015, 35.8% of all homeowners were under the age of 35. That’s a bit over a third of all homeowners, but their inability to purchase homes in higher priced, seller driven housing markets, like the Seattle area, may be a reason for concern. Their income and debt are not in line with home affordability in these desirable urban regions. Even though our economic outlook is rosier in the Puget Sound area, the median income for a millennial does not match up with median home prices in the most popular Seattle and Eastside neighborhoods.

Now that we have witnessed 2015 unfold, and reviewed what did not pan out from last year’s New Year predictions, let’s take a peek at real estate projections for 2016:

  1. An increase in fixed rate mortgages. Realtor.com is forecasting an increase to 4.65% by the end of 2016, which is still less than the 4.75% pegged by some experts as 2015 dawned almost a year ago.
  2. Slowdowns in both home sales and home prices. This is not seen as a bad thing, but a necessary happening to return the housing to a more normal state.
  3. More millennials entering the housing market. Rising rental costs, growing families, the potential for climbing mortgage rates are all factors that will probably nudge millennials to enter the housing market at a gradually increasing rate.
  4. More affordable new construction. Homebuilders who are embracing entry level homes, and increasing the number they are building, are outperforming peer companies.
  5. Seattle will still be a hot real estate market during 2016. Svenja Gudell, new chief economist for Zillow.com, mentioned the continued decline in inventory and demand in our region will still fuel our local housing market in the New Year.
  6. Technological innovations for the real estate transaction process will continue to hit the market place. OB Jacobi, president of Windermere Real Estate, has shared how important it is for the industry to maximize technology to empower and educate consumers in meaningful and innovative ways.
  7. Rents will continue to rise at a faster pace than home prices. This is a trend to be watching closely, since such a large chunk of the country features rental prices that exceed 30% of renter incomes. In the Seattle area, we started seeing some relief from continued big increases in rent toward the end of 2015, but it’s still tough to find an affordable rental in popular Seattle neighborhoods. Seattle rents are the 8th highest in the nation.

Now it is your turn. What do you think will be on the horizon of the 2016 housing market? Do you think interest rates will still hover in the low 4s for most of the year, or start to creep up toward 5%? Will the seller’s market still dominate Seattle real estate for most of 2016? Please share your thoughts in the comment section below.

Photo credit: Frantzou Fleurine, Unsplash.com