Published August 16, 2021
August Market Update
The summer market is continuing to move at a steady pace with all major metrics of the market showing strength though there are some signs of hope for a bit more balance in the market for buyers.
- Inventory - increased by 0.1 months to 0.8 months in King and 0.3 months to 0.7 months in Snohomish county in July. This is a positive sign for buyers, however still incredibly low.
- List to Sale Price Ratio - dropped 1.2% to 106% in King County and 1.1% to 107.2% in Snohomish county in July. Again, moving in the direction of balance, however still very high overall.
- Values - in King County median home price was up 1.8% in July to a high of $789,000, which is 18% higher than last year and 59% higher than 5 years ago. In Snohomish County prices rose 2.3% in July to a high of $665,000 which is 24% higher than 1 year ago, and 82% higher than 5 years ago.
The drivers of this strong market are largely what they've been for the past 18 months... low unemployment, growing wages and low-interest rates combined with exceptionally low inventory of homes due to decades of not being able to build enough housing to keep up with demand. None of these are going away any time soon... from what we can tell. In fact...
- Interest Rates: down 0.2% in July and now averaging 2.8% which increased buyers' purchase power by 2.9%. Compared to this time last year rates are down 0.19%... so they are incredibly low and making mortgages affordable despite the high cost of housing.
As everyone returns to work and we see more and more employment, as well as growth in wages, we don't really see the market growth changing in a meaningful way. For the short term, we'll continue to see this strong growth. In the mid to long term future interest rates will rise and more new home inventory will come back after builders and supply chains get back to full speed, and this combination will likely reduce the competition in the market, slow price growth, and introduce a bit more balance to the market.
Are you buying or selling a home?
When are you planning on buying a new home?
Are you pre-approved for a mortgage?
Would you like to schedule a consultation now?
When are you planning on selling your home?
or another way