The Buyers Edge in the Seattle Market

On Friday July 6th 2007, Elizabeth Rhodes published an article in the Seattle Times titled "Scales tip in favor of homebuyers": http://seattletimes.nwsource.com/html/businesstechnology/2003776992_homesales06.html

As far as newspaper headlines go, the past couple of months have certainly been an interesting time for the mortgage industry. What is helpful to understand is that it is a pendulum and it does swing.

With appreciation taking off like a rocket in 2006 in the Seattle area, affordability became a rising concern. Local home owners could sell their home for quite a bit more than what they had purchased it for; but then again their new home cost quite a bit more than they had planned on.

New home buyers relied on creative financing to get their foot in the door, and depended on appreciation to bring them in for a safe landing. (And a safe landing it was with Washington's forclosure rate at less than half of the national average.)

Now- appreciation is slowing as houses stay on the market a little longer. Sub-prime financing is no longer as available- but perhaps this buyers market will help to even out debt to income ratios so that they are less needed.

A turn towards being a buyers market does not seem to signify that it is a bad time to sell.
Lawrence Yun, senior economist for the National Association of Realtors was quoted:
"I'd still characterize the Seattle market as being healthy — one of the few in the country. And in terms of price appreciation, no one else is doing better."

This sounds like a win-win to me.

Sunday's artice in the Seattle Times about local home prices.

This Sunday the Seattle Times printed an article called "Home prices: from sizzle to simmer".

http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=homevalues20&date=20070520

As we have seen; national house prices have been falling in cities such as Honolulu; Fort Lauderdale, Fla; and Merced, Calif. The National Association of Realtors forecasts prices will decline 1 percent this year.

What does this mean for Seattlites who are have been searching for their dreamhome?

The Northwest has yet to feel the effects of this nationwide condition, but you can't help but to ask if local property values will escape entirely unscathed.

The answer this article stated is that King County has felt the heat- but the result was a 13 percent appreciation rate so far this year.

13 percent appreciation? That hardly seems like a hit- But it is a decrease from the 16 percent appreciation seen in this area in 2006.

Lawrence Yun, the senior economist at the National Association of Realtors, states that Seattle-area prices will continue to climb this year and appreciation will "be above 5 percent. But hitting double-digits in 2007 may be somewhat difficult,".

Above 5 percent.

I hope they keep that information under wraps- otherwise I'm afraid we may find too many people moving to Seattle.