October 28, 2024 • 27 mins
Is the Seattle-Metro area real estate Hot? Or Not?
In this episode of 'Getting Your Edge: How to Right-Size, Your Home Life Podcast', hosts Dennis Day and Judy Gratton explore the Seattle metro area's real estate market. They discuss whether it's currently 'hot or not', key statistics from the Northwest MLS, and detailed trends in Snohomish, King, and Pierce Counties. Topics include median price changes, seasonal cycles, and inventory shortages. They highlight challenges like hedge funds, international investors, and short-term rentals impacting housing availability. Despite these issues, the area's robust economy and appeal persist. The episode also emphasizes their boutique real estate group's expertise in downsizing and client-centric services, inviting listeners to reach out for personalized assistance and explore their podcast and YouTube content.
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Episode Transcript
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Speaker 1 (00:00):
Hello everyone.
This is Dennis Day with Gettingyour Edge Out of Right Size
your Home Alight Podcast.
We are here today to discussSeattle metro area real estate,
hot or not.
I'm with my co host, judyGratton.
Welcome, judy.
Speaker 2 (00:16):
Thank you, dennis, good to see you.
We're also together for thefirst time in a long time.
You see us looking up.
Speaker 1 (00:23):
I have some exciting news.
My son wrote the first offerfor his first purchase.
They did not win.
The winner was $70,000 over andno contingencies Pretty tough
market.
He is in the bull market, whichis, I'm going to assume, the
(00:43):
toughest out there.
Really, yeah, at that pricelevel.
Speaker 2 (00:47):
The lower the price, the more competitive the home,
because we have a shortage ofinventory in this area,
especially in those starterpricing areas.
Speaker 1 (00:58):
When we say Seattle metro area, we're talking about
three main counties Snohomish,king and Pierce County.
King County includes Seattle.
There are some outlyingcounties also included in the
metro area.
If you were in Skagit County,you say to friends in Paris,
where are you from?
Oh, I'm from Seattle.
Everybody does right.
(01:19):
I watch the Seahawks, theMariners.
It kind of revolves aroundSeattle, even if you live in the
outlying areas.
We're going to go into somestats about whether the housing
market is hot or not.
We're not using our intuition,we are going by statistics from
the Northwest MLS, which is theMLS we are a part of.
(01:40):
It covers most of the state.
As an example, this is theentire MLS, which includes most
of Washington, not all, and youcan see that in those months
we've gone up 13%, 13.4% inthose months.
Speaker 2 (02:00):
I believe that the average appreciation by the end
of the year was determined to becloser to 19%.
Oh no, that's 2019.
Speaker 1 (02:12):
We'll get there.
Here is an entire MLS in KingCounty King County is the
location we spend most of ourtime in or Snohomish County.
Here is the bottom of theentire MLS.
We've got a year over year 5%versus a 10% King County.
(02:33):
We're going up.
Now let's talk about median.
What is median?
Speaker 2 (02:37):
Median is halfway between the least expensive
property and the most expensiveproperty.
Speaker 1 (02:44):
It is just halfway between the two and that can be
different than the average price.
I like the median because it'smore accurate and it doesn't get
skewed by wild swings inmassively enormous expensive
properties.
Versus the median you know thathalf are above and half are
(03:04):
below that price.
Here we have Seattle, kingCounty and Stomachat.
We're looking big raises inthose months.
If we cut off here at the first, we can see that prices are
rising in all three of thesemarkets.
Speaker 2 (03:23):
It's interesting when you look at Seattle and see a
growth rate of 10.9%.
During the COVID years theSeattle market went down
significantly.
People, when they couldn'tleave their homes, wanted yards
and started moving into thesurrounding suburbs and leaving
(03:45):
the Seattle area.
It's good to see that Seattleis coming back up and at this
point is the highest in terms ofmedium price range.
Speaker 1 (03:57):
The closer you get to Seattle from outlying areas,
the more expensive your housingbecomes.
Speaker 2 (04:02):
Yes, and that was true even with the suburbs.
Bellevue would be another placethat would be heavily weighted
in terms of there was a lot ofbusiness in those areas.
The people that work in thosebusinesses want to live as close
as possible to where they work,Even though they move to what
is considered suburbs in thisarea.
(04:24):
They tried to stay as close toSeattle as they could and still
get a calm on a lot.
That gave them more room.
Speaker 1 (04:34):
Here we go.
We've got Snohomish County,seattle, the entire MLS and King
County.
Prices are generally rising.
Here is the cutoff for the year.
Speaker 2 (04:46):
So you did see a little bit of a dip, and that's
not unusual in the beginning ofa year.
When you're looking at January,that's the slowest time of our
market, based on seasonality,which we're a very seasonal
market here, because of theweather, which we're a very
seasonal market here.
Speaker 1 (05:04):
because of the weather, I wanted to put a
little break in here.
So this is September 23 andSeptember 24.
So we've got these spikes, dipsand a movement up another
little spike.
You can see the kind of up anddown, but generally we are above
the September 2023 prices inall the markets.
(05:28):
The entire MLS doesn't seem togrow near as fast.
Speaker 2 (05:34):
Because you're incorporating farmland and
really small towns that are along way away from any metro
area.
So those do grow more slowlyand at a lower rate because
population is going to growfastest and largest around those
metropolitan areas where peoplework.
Speaker 1 (05:57):
Well, next slide.
Do you see the change?
All right, we've got medianpercent of last original price.
So one of the indicators of ahot, cold or medium market is
our people who list their homefor sale getting 100 percent
above 100 percent below 100percent in the asking price.
(06:19):
And you can see it's kind of awild little bump there.
Speaker 2 (06:24):
And it has evened out .
Speaker 1 (06:26):
Right.
Speaker 2 (06:26):
And these are the kind of things that we look at
when someone asks us to helpdetermine the value of their
home.
We go in and look at thesestats to see what the market is
doing in that area and what wecould anticipate.
If you look back, just afterJanuary of 2024, there was a
real spike up for SnohomishCounty.
(06:48):
Now it's back at 100%.
If you put a home on the marketand it's priced well, priced
according to the condition thatit's in, priced according to
what the homes around it havesold for, then you could
anticipate 100% of the askingprice in most cases.
Speaker 1 (07:09):
Now, even though it's not 100%, we're looking at 99.2
or 98.4 for the entire.
That's pretty close to yourasking price.
Speaker 2 (07:19):
It's still close to the asking price.
Speaker 1 (07:22):
We had a dip right around January and then it took
a spike, but for the most partyou can see it's pretty level at
100 percent.
Speaker 2 (07:31):
You're in the slowest time of the market.
Where that dip is, it's coldand normally rainy or maybe even
snowy.
In this area, People haveholidays and they're not moving.
The people that do move have abetter opportunity of making an
offer on a home that's lowerthan asking and getting it, but
even then again, it's still inthe what 90-something range.
Speaker 1 (07:56):
All right, here's our market update for King County
and Snohomish County.
Prices are up.
Listings are up.
Speaker 2 (08:02):
That's a good thing, because for a while now we
haven't had any listings becausepeople didn't know where they
were going to go and interestrates were higher.
Speaker 1 (08:12):
They've come down a bit closed sales are up days on
the market, so how many daysuntil your kong comes under
contract is down.
The percent of original priceis hovering right around.
To me that's a pretty strongmarket.
Speaker 2 (08:30):
It's a strong market.
Speaker 1 (08:31):
It may not be like it was way in the 22.
Yeah.
Speaker 2 (08:36):
Even during COVID, the market was insane because
the feds lowered the interestrates so much.
We had a lot of business duringthat period of time.
It's funny because you can lookat dates where the interest
rates started to rise.
I believe it was June of 2020.
You started to see things slowdown because fewer people were
(08:56):
buying.
The interest rates were goingup that they're coming back down
.
That's part of what will spurthe market on.
Speaker 1 (09:05):
Let's talk about the real estate market cycle.
Speaker 2 (09:08):
Yes.
Speaker 1 (09:08):
Because there is a predictable pattern to the real
estate market.
Yep, and you see the up anddown and up and down.
That is the cycle.
There are a few aberrationshere and there, but in January
the market is low.
Speaker 2 (09:30):
Lowest amount of inventory.
Lowest amount of buyers.
Speaker 1 (09:35):
And then you get into September, april, may and June
and we're peaking.
Speaker 2 (09:41):
And that's where your appreciation is.
Homes appreciate during thosefirst months of spring.
Then they kind of level off inthe summer months.
So if you want to get a higherprice for your home, putting it
on the market in late April, may, early part of June, you're
probably going to see the mostappreciation during that period
(10:02):
of time.
Speaker 1 (10:03):
And there is a little bit of a lag because get a
under contract and then it'sreally not until 30 days or so
until you close and thestatistics come up in the MLS.
So if the peak is in June, thatmeans most of the sales are
taking place in June.
Speaker 2 (10:20):
Well, yes, that's true.
Unfortunately, because theyhave to collect and look at all
the data, these reports aregenerally 30 days behind.
So when we're coming up onNovember, we will be looking
first part of October, aroundthe 15th of the month.
Speaker 1 (10:40):
There's a definite cycle.
The best time to sell for thetop dollar is Early summer yeah.
And then in August we get a dipbecause people are on vacation
getting ready to get their kidsback to school.
They're trying to squeeze inthat last little bit of yard
work, so forth.
(11:00):
So August tends to be a littlebit slower, but after late
September, early October, wehave a bit.
We have a bit Surge.
Now, does that mean you can'tsell your home in November or
December?
No, january no.
Speaker 2 (11:20):
No, because people that are out and looking in that
period of time are very seriousbuyers.
When you're in the summermonths you could have a lot of
people who are just drivingaround seeing an open house,
think it'd be fun to look atproperties, not really committed
to buying.
But when they're looking in thewinter months they are very
committed to buying and so thepeople that do come through your
(11:42):
home may be fewer, but they'remuch more serious buyers.
Speaker 1 (11:47):
This is an indication of the long-term health of the
Seattle metro area market.
You can see in 2014, prices arein the 400s for the entire MLS,
below 300.
And what's happened in 10 years?
If you had purchased a home inSeattle right around $400,000 in
(12:12):
2014, you would have had growthof 100% or 11% Appreciation, or
the money that your home is nowworth.
Now, if I was in stocks andbonds or some other kind of
investment, that's a pretty darngood return.
It really is.
You get to live in the house.
Speaker 2 (12:32):
We have a lot of people out there buying homes
that they're not living in, andthat is part of the reason that
first-time homebuyers are havingsuch a hard time.
We have hedge funds that havebeen investing in real estate
since 2012, when the JOBS Actcame into play.
Last year, they purchased 26%of all the real estate that was
(12:56):
sold in the United States.
They hold them as rentals.
They're not very good landlords, they don't take very good care
of the property and they chargean awful lot of rent for them.
Then you have out of countryinvestors doing very much the
same thing, because our economyis so strong Even if you don't
(13:18):
see it right at this moment,it's the strongest economy in
the world right now and then youhave this Airbnb thing.
Everybody wants to invest in aproperty somewhere where maybe
they would like to visitoccasionally and make money off
of.
It hurt the inventory, not tomention the fact that builders
(13:40):
haven't been building as muchbecause interest rates were high
for them as well.
We are hoping that they willstart building as the interest
rates come down, and I know fora fact that one of the
congressmen from Washingtonstate, adam Smith, is trying to
get a bill before Congress toget hedge funds out of real
(14:01):
estate.
This is not good for Americanhomeowners.
Speaker 1 (14:07):
It's great for these multi-million dollar investors,
but destroys the housing stock.
Speaker 2 (14:16):
A lot of cities are now putting moratoriums on air.
They're not allowing them,they're requiring permits and
neighbors aren't too crazy whenthey see them come into a
neighborhood.
So I think those happens atresort communities and people
buy places to rent with VRBO orAirbnb.
Speaker 1 (14:48):
They raise the prices dramatically on housing and the
people who work at thoseresorts the ski lift operators,
the waitress, the cashier at thegift shop have no place to live
because it's just too expensiveand their wages don't cover the
cost of that rent.
It's a real problem.
I don't have a fast solution.
(15:09):
I know several resortcommunities around Seattle are
putting moratoriums onshort-term rentals and they are
talking about limiting thenumber within a city or a
community.
Decrease the number of homesavailable for people to buy.
This is a huge problem inVictoria, Vancouver, San
(15:30):
Francisco, New York, all over.
It's a big problem.
Let's get back to the graphthere.
I just want to say that Iunderstand housing is extremely
expensive in the Seattle areacompared to other parts of the
country, but if you can get in,you're going to earn equity.
It will be a good investment.
(15:50):
We haven't had a bottom outsince 2014.
Speaker 2 (15:54):
2014 really wasn't a bottom out.
It was still good real estate.
It's just the prices were somuch lower than they are now.
Where we had the real bottomout was when the economy crashed
in the early 2000s.
At that point in time, homesdid lose about half their value.
There were people who wereforced to sell.
(16:15):
There were people who looked atthat as a business decision and
said.
There were people who looked atthat as a business decision and
(16:42):
said I'm underwater in this,it's not a good investment.
They short where they owed moremoney to the really big problem
in our country and it isdriving prices down and
generally most people won't havethe money to buy those
lower-priced homes at that pointin time.
Who comes in and buys thoselower-priced homes are things
like hedge funds.
That's a perfect time to buy ifyou've got the money.
Hopefully we're not going tosee another one of those
(17:05):
catastrophes in the near future.
During COVID, a worldwidecatastrophe, our government said
let's lower the interest ratesto keep our economy afloat.
Speaker 1 (17:16):
It's been a lifetime.
We hope Not going to happenagain.
Good investment in CO.
All right, let's look at themortgage rate 73 to 2020.
Oh, we had some bad years inthe late 70s, early 80s.
Speaker 2 (17:31):
They were up in the 20% and people still bought real
estate, but they were very high.
Speaker 1 (17:36):
Yeah, it was a tough market to sell and again, that
was just going nuts.
The Fed put a huge block on,essentially created a recession
in order to combat inflation.
Hopefully we won't have to dothat drastic.
Speaker 2 (17:56):
Well, what we're seeing is that we are pulling
out of the inflation at thispoint in time.
Speaker 1 (18:01):
Yeah, so you see the bottom of those interest rates
in 2001, 2.96.
2.21.
Oh, I got new glasses or neweyes.
We're not going to see that,are we?
Speaker 2 (18:15):
Not unless you have an emergency.
And generally, other thingsdon't line up to make that a
positive experience.
Speaker 1 (18:22):
I talked to Trevor Robert Capstone on Monday.
He said interest rates wererising.
The Fed dropped to the rate forbanking but there's concern
about the get elected.
They had a very good jobsmarket report in September or
(18:44):
August.
Some conspiracy theorists claimthey pledged it so somebody
else could win.
Interest rates have crept up abit.
Bison said they're looking atbetween 6.4 to 6.8 percent
interest.
Speaker 2 (18:59):
When the Fed drops the rate, that does not
necessarily match what you seeas a mortgage interest rate,
because our mortgage rates aretied to the bond market.
When people feel uncertainabout the stock market, they
take their money out of thestock market and buy bonds.
(19:20):
When they buy bonds, interestrates come down, and when they
put their money back in thestock market and fewer people
are buying bonds, interest ratesgo up.
Right now, the stock market isat highs.
They've never been as high asthey are now, ever.
So the stock market for rightnow.
(19:43):
Who knows what happens,especially next month?
But for right now, the stockmarket, bond market is probably
not as good.
I haven't looked at it, that'snot really my area of expertise,
but interest rates creep backup when the bond market goes
down.
Speaker 1 (20:00):
Part of the issue here is that extremely low
interest rates from 2019 to 2021below 4% and even below 3%, was
a catastrophe, a pandemic, aonce in a hundred year event.
And 6.8 seems enormously highand for a first time buyer, from
(20:25):
3% to 6.8, you're more thandoubling your payment per month.
Speaker 2 (20:31):
And you're cutting in half the amount that you can
actually purchase, because youqualify based on what you can
pay.
So if you are paying more forless purchase, then you're not
going to be able to buy as much.
Speaker 1 (20:48):
Alrighty, that's it for our special.
What's going on here?
Stop sharing.
I said, stop sharing.
It did, oh my God, go around.
Can you balance my checkbookplease?
Okay, in my opinion, theSeattle metro area market is
still going strong.
Speaker 2 (21:09):
It is.
Speaker 1 (21:09):
It's hot.
I mean we were seeing inSnohomish County 20 percent, 24
percent 2019.
Speaker 2 (21:16):
Prices and prices Appreciation was 19 something in
2019 and 2020.
It just went off the rails whenthe interest rates dropped and
it was going like that until theinterest rates came back up and
then you could see it startingto come back down a little bit
of an adjustment and people movehere because they see
(21:41):
lower-priced homes in otherparts of the country, which is
true.
We're a beautiful state,absolutely beautiful.
We have lots of areas thatpeople would like to retire to.
We have lots of arts, lots ofreasons that people would love
to live here, and then we havetechnology and Boeing that drive
(22:03):
even more people to come intothe state all over the world and
that just drives the prices up.
Every time your neighbor's homesells, it's going to change the
value of your home.
So as they're driving up, it'scutting more and more people out
.
I don't ever want to leaveWashington because it's my
(22:24):
favorite place and I feel if Ido, I'll never get back in again
because the prices, unless wehave a major catastrophe,
they're going to stay aroundwhere they are right now.
When I bought my home, we paid,I think, $130,000 for it in
Bothell and that was an averageprice for a middle-class home in
(22:46):
Bothell.
The average price for amiddle-class home in Bothell now
is a million.
I used to talk in hundreds,then 300,000, then 500,000.
Now I'm talking in a million.
People also earn more moneygenerally.
In 1900, you could buy a cookiefor a penny.
You can't anymore.
We've had a little unnaturalinflation here, but it's
(23:10):
probably not going to go down alot.
Speaker 1 (23:13):
It's interesting that you would think that with the
drastic rise in interest rates,that prices in holes would come
down.
Speaker 2 (23:23):
They do a little.
Speaker 1 (23:24):
Yeah.
Speaker 2 (23:25):
You saw that they do a little In a good, healthy
market.
In Washington state, normalappreciation is somewhere
between 4% and 7% every year.
That's good growth.
The craziness is when we don'thave enough inventory, why do we
have a shortage of houses?
Especially not during COVID.
(23:45):
Nobody was building and peoplewere moving out to the suburbs
like crazy.
And then you have unusualbuyers like hedge funds and
international buyers coming into invest in residential real
estate from the standpoint ofholding onto it because it
appreciates, and then renting itout and then, especially when
(24:09):
we had a shortage of rentals aswell, driving up the rental
prices until that stops, untilthose things do some sort of a
correction.
We're trying I mean everybodyis trying to think of ways to
build more houses.
We have more people on this flylane, so we need more houses.
Speaker 1 (24:31):
Yeah, not an easy one to solve, judy.
Let's talk about our businessand how we can help people.
We've pointed out that we don'trely on our intuition to make
decisions about what type ofmarket we use, the facts and so
forth.
We are a boutique real estategroup here a boutique real
(24:58):
estate group here.
Speaker 2 (24:59):
I believe it's very important that there is a good
relationship between the personrepresenting you and you, so we
choose to work only with peoplethere's a really good
relationship.
If it feels forced or difficult, we're not out looking to get
every single transaction.
That's not who we are.
We're out for doing the best wecan for people that we really
(25:24):
fit with.
It is a bit of an exclusivesort of thing.
We have a lot of experience inhelping people downsize and I
really enjoy doing that.
We've spent two years now onthis podcast on downsizing, so
obviously there is a lot tothink about when you decide to
go that route.
Speaker 1 (25:44):
We have the resources .
We have access to kinds ofdifferent vendors that can help
you facilitate that process.
We built our business around it.
Help you facilitate thatprocess.
We built our business around it.
We are the experts ondownsizing in the Seattle metro
area and we'd love to help youif it's the right fit.
We don't turn away buyers likeI'm working with buyers right
(26:06):
now and we don't turn awaypeople who are relocation.
Speaker 2 (26:12):
It's very much about the relationship that we have
with our clients.
We don't care if you're afirst-time homebuyer, a
downsizer, a millionaire.
What we're looking for is agood, solid relationship where
we know the outcome for ourclients will be the best we can
provide.
Speaker 1 (26:30):
I worked in public education for 31 years.
If I was trying to make, Inever would have done that.
Speaker 2 (26:37):
It's too short not to enjoy it.
Speaker 1 (26:38):
Yeah, and that's what we want to do.
We want to enjoy our clients,get them the right help and make
this transaction as smooth aspossible so they can move with
the least amount of confusion.
Speaker 2 (26:52):
Disappointment, stress, anything else.
Judy Dennis, all right, pleasefeel free to reach out to us If
you have any questions.
There's no cost for answeringquestions.
Speaker 1 (27:04):
And we are, at wwwedgegroupteamcom, happy to
help you and take a look at ourother podcast episodes.
This is number 15.
So we do it biweekly.
So essentially we've done apodcast once a week over a year,
two years.
Over two years We've done ayear's worth of weekly podcasts.
Speaker 2 (27:28):
How old are you?
Speaker 1 (27:30):
52.
I just seem like 52 weeks in ayear.
We've done 52.
Yeah, wow, over two years.
Okay, that's it.
Thanks for watching.
We really appreciate it.
We'd love to hear from you andthanks, check out our YouTube
videos If you haven't seen thoseas well.
Thanks for watching.
Bye.
Hello everyone.
This is Dennis Day with Gettingyour Edge Out of Right Size
your Home Alight Podcast.
We are here today to discussSeattle metro area real estate,
hot or not.
I'm with my co host, judyGratton.
Welcome, judy.
Speaker 2 (00:16):
Thank you, dennis, good to see you.
We're also together for thefirst time in a long time.
You see us looking up.
Speaker 1 (00:23):
I have some exciting news.
My son wrote the first offerfor his first purchase.
They did not win.
The winner was $70,000 over andno contingencies Pretty tough
market.
He is in the bull market, whichis, I'm going to assume, the
(00:43):
toughest out there.
Really, yeah, at that pricelevel.
Speaker 2 (00:47):
The lower the price, the more competitive the home,
because we have a shortage ofinventory in this area,
especially in those starterpricing areas.
Speaker 1 (00:58):
When we say Seattle metro area, we're talking about
three main counties Snohomish,king and Pierce County.
King County includes Seattle.
There are some outlyingcounties also included in the
metro area.
If you were in Skagit County,you say to friends in Paris,
where are you from?
Oh, I'm from Seattle.
Everybody does right.
(01:19):
I watch the Seahawks, theMariners.
It kind of revolves aroundSeattle, even if you live in the
outlying areas.
We're going to go into somestats about whether the housing
market is hot or not.
We're not using our intuition,we are going by statistics from
the Northwest MLS, which is theMLS we are a part of.
(01:40):
It covers most of the state.
As an example, this is theentire MLS, which includes most
of Washington, not all, and youcan see that in those months
we've gone up 13%, 13.4% inthose months.
Speaker 2 (02:00):
I believe that the average appreciation by the end
of the year was determined to becloser to 19%.
Oh no, that's 2019.
Speaker 1 (02:12):
We'll get there.
Here is an entire MLS in KingCounty King County is the
location we spend most of ourtime in or Snohomish County.
Here is the bottom of theentire MLS.
We've got a year over year 5%versus a 10% King County.
(02:33):
We're going up.
Now let's talk about median.
What is median?
Speaker 2 (02:37):
Median is halfway between the least expensive
property and the most expensiveproperty.
Speaker 1 (02:44):
It is just halfway between the two and that can be
different than the average price.
I like the median because it'smore accurate and it doesn't get
skewed by wild swings inmassively enormous expensive
properties.
Versus the median you know thathalf are above and half are
(03:04):
below that price.
Here we have Seattle, kingCounty and Stomachat.
We're looking big raises inthose months.
If we cut off here at the first, we can see that prices are
rising in all three of thesemarkets.
Speaker 2 (03:23):
It's interesting when you look at Seattle and see a
growth rate of 10.9%.
During the COVID years theSeattle market went down
significantly.
People, when they couldn'tleave their homes, wanted yards
and started moving into thesurrounding suburbs and leaving
(03:45):
the Seattle area.
It's good to see that Seattleis coming back up and at this
point is the highest in terms ofmedium price range.
Speaker 1 (03:57):
The closer you get to Seattle from outlying areas,
the more expensive your housingbecomes.
Speaker 2 (04:02):
Yes, and that was true even with the suburbs.
Bellevue would be another placethat would be heavily weighted
in terms of there was a lot ofbusiness in those areas.
The people that work in thosebusinesses want to live as close
as possible to where they work,Even though they move to what
is considered suburbs in thisarea.
(04:24):
They tried to stay as close toSeattle as they could and still
get a calm on a lot.
That gave them more room.
Speaker 1 (04:34):
Here we go.
We've got Snohomish County,seattle, the entire MLS and King
County.
Prices are generally rising.
Here is the cutoff for the year.
Speaker 2 (04:46):
So you did see a little bit of a dip, and that's
not unusual in the beginning ofa year.
When you're looking at January,that's the slowest time of our
market, based on seasonality,which we're a very seasonal
market here, because of theweather, which we're a very
seasonal market here.
Speaker 1 (05:04):
because of the weather, I wanted to put a
little break in here.
So this is September 23 andSeptember 24.
So we've got these spikes, dipsand a movement up another
little spike.
You can see the kind of up anddown, but generally we are above
the September 2023 prices inall the markets.
(05:28):
The entire MLS doesn't seem togrow near as fast.
Speaker 2 (05:34):
Because you're incorporating farmland and
really small towns that are along way away from any metro
area.
So those do grow more slowlyand at a lower rate because
population is going to growfastest and largest around those
metropolitan areas where peoplework.
Speaker 1 (05:57):
Well, next slide.
Do you see the change?
All right, we've got medianpercent of last original price.
So one of the indicators of ahot, cold or medium market is
our people who list their homefor sale getting 100 percent
above 100 percent below 100percent in the asking price.
(06:19):
And you can see it's kind of awild little bump there.
Speaker 2 (06:24):
And it has evened out .
Speaker 1 (06:26):
Right.
Speaker 2 (06:26):
And these are the kind of things that we look at
when someone asks us to helpdetermine the value of their
home.
We go in and look at thesestats to see what the market is
doing in that area and what wecould anticipate.
If you look back, just afterJanuary of 2024, there was a
real spike up for SnohomishCounty.
(06:48):
Now it's back at 100%.
If you put a home on the marketand it's priced well, priced
according to the condition thatit's in, priced according to
what the homes around it havesold for, then you could
anticipate 100% of the askingprice in most cases.
Speaker 1 (07:09):
Now, even though it's not 100%, we're looking at 99.2
or 98.4 for the entire.
That's pretty close to yourasking price.
Speaker 2 (07:19):
It's still close to the asking price.
Speaker 1 (07:22):
We had a dip right around January and then it took
a spike, but for the most partyou can see it's pretty level at
100 percent.
Speaker 2 (07:31):
You're in the slowest time of the market.
Where that dip is, it's coldand normally rainy or maybe even
snowy.
In this area, People haveholidays and they're not moving.
The people that do move have abetter opportunity of making an
offer on a home that's lowerthan asking and getting it, but
even then again, it's still inthe what 90-something range.
Speaker 1 (07:56):
All right, here's our market update for King County
and Snohomish County.
Prices are up.
Listings are up.
Speaker 2 (08:02):
That's a good thing, because for a while now we
haven't had any listings becausepeople didn't know where they
were going to go and interestrates were higher.
Speaker 1 (08:12):
They've come down a bit closed sales are up days on
the market, so how many daysuntil your kong comes under
contract is down.
The percent of original priceis hovering right around.
To me that's a pretty strongmarket.
Speaker 2 (08:30):
It's a strong market.
Speaker 1 (08:31):
It may not be like it was way in the 22.
Yeah.
Speaker 2 (08:36):
Even during COVID, the market was insane because
the feds lowered the interestrates so much.
We had a lot of business duringthat period of time.
It's funny because you can lookat dates where the interest
rates started to rise.
I believe it was June of 2020.
You started to see things slowdown because fewer people were
(08:56):
buying.
The interest rates were goingup that they're coming back down
.
That's part of what will spurthe market on.
Speaker 1 (09:05):
Let's talk about the real estate market cycle.
Speaker 2 (09:08):
Yes.
Speaker 1 (09:08):
Because there is a predictable pattern to the real
estate market.
Yep, and you see the up anddown and up and down.
That is the cycle.
There are a few aberrationshere and there, but in January
the market is low.
Speaker 2 (09:30):
Lowest amount of inventory.
Lowest amount of buyers.
Speaker 1 (09:35):
And then you get into September, april, may and June
and we're peaking.
Speaker 2 (09:41):
And that's where your appreciation is.
Homes appreciate during thosefirst months of spring.
Then they kind of level off inthe summer months.
So if you want to get a higherprice for your home, putting it
on the market in late April, may, early part of June, you're
probably going to see the mostappreciation during that period
(10:02):
of time.
Speaker 1 (10:03):
And there is a little bit of a lag because get a
under contract and then it'sreally not until 30 days or so
until you close and thestatistics come up in the MLS.
So if the peak is in June, thatmeans most of the sales are
taking place in June.
Speaker 2 (10:20):
Well, yes, that's true.
Unfortunately, because theyhave to collect and look at all
the data, these reports aregenerally 30 days behind.
So when we're coming up onNovember, we will be looking
first part of October, aroundthe 15th of the month.
Speaker 1 (10:40):
There's a definite cycle.
The best time to sell for thetop dollar is Early summer yeah.
And then in August we get a dipbecause people are on vacation
getting ready to get their kidsback to school.
They're trying to squeeze inthat last little bit of yard
work, so forth.
(11:00):
So August tends to be a littlebit slower, but after late
September, early October, wehave a bit.
We have a bit Surge.
Now, does that mean you can'tsell your home in November or
December?
No, january no.
Speaker 2 (11:20):
No, because people that are out and looking in that
period of time are very seriousbuyers.
When you're in the summermonths you could have a lot of
people who are just drivingaround seeing an open house,
think it'd be fun to look atproperties, not really committed
to buying.
But when they're looking in thewinter months they are very
committed to buying and so thepeople that do come through your
(11:42):
home may be fewer, but they'remuch more serious buyers.
Speaker 1 (11:47):
This is an indication of the long-term health of the
Seattle metro area market.
You can see in 2014, prices arein the 400s for the entire MLS,
below 300.
And what's happened in 10 years?
If you had purchased a home inSeattle right around $400,000 in
(12:12):
2014, you would have had growthof 100% or 11% Appreciation, or
the money that your home is nowworth.
Now, if I was in stocks andbonds or some other kind of
investment, that's a pretty darngood return.
It really is.
You get to live in the house.
Speaker 2 (12:32):
We have a lot of people out there buying homes
that they're not living in, andthat is part of the reason that
first-time homebuyers are havingsuch a hard time.
We have hedge funds that havebeen investing in real estate
since 2012, when the JOBS Actcame into play.
Last year, they purchased 26%of all the real estate that was
(12:56):
sold in the United States.
They hold them as rentals.
They're not very good landlords, they don't take very good care
of the property and they chargean awful lot of rent for them.
Then you have out of countryinvestors doing very much the
same thing, because our economyis so strong Even if you don't
(13:18):
see it right at this moment,it's the strongest economy in
the world right now and then youhave this Airbnb thing.
Everybody wants to invest in aproperty somewhere where maybe
they would like to visitoccasionally and make money off
of.
It hurt the inventory, not tomention the fact that builders
(13:40):
haven't been building as muchbecause interest rates were high
for them as well.
We are hoping that they willstart building as the interest
rates come down, and I know fora fact that one of the
congressmen from Washingtonstate, adam Smith, is trying to
get a bill before Congress toget hedge funds out of real
(14:01):
estate.
This is not good for Americanhomeowners.
Speaker 1 (14:07):
It's great for these multi-million dollar investors,
but destroys the housing stock.
Speaker 2 (14:16):
A lot of cities are now putting moratoriums on air.
They're not allowing them,they're requiring permits and
neighbors aren't too crazy whenthey see them come into a
neighborhood.
So I think those happens atresort communities and people
buy places to rent with VRBO orAirbnb.
Speaker 1 (14:48):
They raise the prices dramatically on housing and the
people who work at thoseresorts the ski lift operators,
the waitress, the cashier at thegift shop have no place to live
because it's just too expensiveand their wages don't cover the
cost of that rent.
It's a real problem.
I don't have a fast solution.
(15:09):
I know several resortcommunities around Seattle are
putting moratoriums onshort-term rentals and they are
talking about limiting thenumber within a city or a
community.
Decrease the number of homesavailable for people to buy.
This is a huge problem inVictoria, Vancouver, San
(15:30):
Francisco, New York, all over.
It's a big problem.
Let's get back to the graphthere.
I just want to say that Iunderstand housing is extremely
expensive in the Seattle areacompared to other parts of the
country, but if you can get in,you're going to earn equity.
It will be a good investment.
(15:50):
We haven't had a bottom outsince 2014.
Speaker 2 (15:54):
2014 really wasn't a bottom out.
It was still good real estate.
It's just the prices were somuch lower than they are now.
Where we had the real bottomout was when the economy crashed
in the early 2000s.
At that point in time, homesdid lose about half their value.
There were people who wereforced to sell.
(16:15):
There were people who looked atthat as a business decision and
said.
There were people who looked atthat as a business decision and
(16:42):
said I'm underwater in this,it's not a good investment.
They short where they owed moremoney to the really big problem
in our country and it isdriving prices down and
generally most people won't havethe money to buy those
lower-priced homes at that pointin time.
Who comes in and buys thoselower-priced homes are things
like hedge funds.
That's a perfect time to buy ifyou've got the money.
Hopefully we're not going tosee another one of those
(17:05):
catastrophes in the near future.
During COVID, a worldwidecatastrophe, our government said
let's lower the interest ratesto keep our economy afloat.
Speaker 1 (17:16):
It's been a lifetime.
We hope Not going to happenagain.
Good investment in CO.
All right, let's look at themortgage rate 73 to 2020.
Oh, we had some bad years inthe late 70s, early 80s.
Speaker 2 (17:31):
They were up in the 20% and people still bought real
estate, but they were very high.
Speaker 1 (17:36):
Yeah, it was a tough market to sell and again, that
was just going nuts.
The Fed put a huge block on,essentially created a recession
in order to combat inflation.
Hopefully we won't have to dothat drastic.
Speaker 2 (17:56):
Well, what we're seeing is that we are pulling
out of the inflation at thispoint in time.
Speaker 1 (18:01):
Yeah, so you see the bottom of those interest rates
in 2001, 2.96.
2.21.
Oh, I got new glasses or neweyes.
We're not going to see that,are we?
Speaker 2 (18:15):
Not unless you have an emergency.
And generally, other thingsdon't line up to make that a
positive experience.
Speaker 1 (18:22):
I talked to Trevor Robert Capstone on Monday.
He said interest rates wererising.
The Fed dropped to the rate forbanking but there's concern
about the get elected.
They had a very good jobsmarket report in September or
(18:44):
August.
Some conspiracy theorists claimthey pledged it so somebody
else could win.
Interest rates have crept up abit.
Bison said they're looking atbetween 6.4 to 6.8 percent
interest.
Speaker 2 (18:59):
When the Fed drops the rate, that does not
necessarily match what you seeas a mortgage interest rate,
because our mortgage rates aretied to the bond market.
When people feel uncertainabout the stock market, they
take their money out of thestock market and buy bonds.
(19:20):
When they buy bonds, interestrates come down, and when they
put their money back in thestock market and fewer people
are buying bonds, interest ratesgo up.
Right now, the stock market isat highs.
They've never been as high asthey are now, ever.
So the stock market for rightnow.
(19:43):
Who knows what happens,especially next month?
But for right now, the stockmarket, bond market is probably
not as good.
I haven't looked at it, that'snot really my area of expertise,
but interest rates creep backup when the bond market goes
down.
Speaker 1 (20:00):
Part of the issue here is that extremely low
interest rates from 2019 to 2021below 4% and even below 3%, was
a catastrophe, a pandemic, aonce in a hundred year event.
And 6.8 seems enormously highand for a first time buyer, from
(20:25):
3% to 6.8, you're more thandoubling your payment per month.
Speaker 2 (20:31):
And you're cutting in half the amount that you can
actually purchase, because youqualify based on what you can
pay.
So if you are paying more forless purchase, then you're not
going to be able to buy as much.
Speaker 1 (20:48):
Alrighty, that's it for our special.
What's going on here?
Stop sharing.
I said, stop sharing.
It did, oh my God, go around.
Can you balance my checkbookplease?
Okay, in my opinion, theSeattle metro area market is
still going strong.
Speaker 2 (21:09):
It is.
Speaker 1 (21:09):
It's hot.
I mean we were seeing inSnohomish County 20 percent, 24
percent 2019.
Speaker 2 (21:16):
Prices and prices Appreciation was 19 something in
2019 and 2020.
It just went off the rails whenthe interest rates dropped and
it was going like that until theinterest rates came back up and
then you could see it startingto come back down a little bit
of an adjustment and people movehere because they see
(21:41):
lower-priced homes in otherparts of the country, which is
true.
We're a beautiful state,absolutely beautiful.
We have lots of areas thatpeople would like to retire to.
We have lots of arts, lots ofreasons that people would love
to live here, and then we havetechnology and Boeing that drive
(22:03):
even more people to come intothe state all over the world and
that just drives the prices up.
Every time your neighbor's homesells, it's going to change the
value of your home.
So as they're driving up, it'scutting more and more people out
.
I don't ever want to leaveWashington because it's my
(22:24):
favorite place and I feel if Ido, I'll never get back in again
because the prices, unless wehave a major catastrophe,
they're going to stay aroundwhere they are right now.
When I bought my home, we paid,I think, $130,000 for it in
Bothell and that was an averageprice for a middle-class home in
(22:46):
Bothell.
The average price for amiddle-class home in Bothell now
is a million.
I used to talk in hundreds,then 300,000, then 500,000.
Now I'm talking in a million.
People also earn more moneygenerally.
In 1900, you could buy a cookiefor a penny.
You can't anymore.
We've had a little unnaturalinflation here, but it's
(23:10):
probably not going to go down alot.
Speaker 1 (23:13):
It's interesting that you would think that with the
drastic rise in interest rates,that prices in holes would come
down.
Speaker 2 (23:23):
They do a little.
Speaker 1 (23:24):
Yeah.
Speaker 2 (23:25):
You saw that they do a little In a good, healthy
market.
In Washington state, normalappreciation is somewhere
between 4% and 7% every year.
That's good growth.
The craziness is when we don'thave enough inventory, why do we
have a shortage of houses?
Especially not during COVID.
(23:45):
Nobody was building and peoplewere moving out to the suburbs
like crazy.
And then you have unusualbuyers like hedge funds and
international buyers coming into invest in residential real
estate from the standpoint ofholding onto it because it
appreciates, and then renting itout and then, especially when
(24:09):
we had a shortage of rentals aswell, driving up the rental
prices until that stops, untilthose things do some sort of a
correction.
We're trying I mean everybodyis trying to think of ways to
build more houses.
We have more people on this flylane, so we need more houses.
Speaker 1 (24:31):
Yeah, not an easy one to solve, judy.
Let's talk about our businessand how we can help people.
We've pointed out that we don'trely on our intuition to make
decisions about what type ofmarket we use, the facts and so
forth.
We are a boutique real estategroup here a boutique real
(24:58):
estate group here.
Speaker 2 (24:59):
I believe it's very important that there is a good
relationship between the personrepresenting you and you, so we
choose to work only with peoplethere's a really good
relationship.
If it feels forced or difficult, we're not out looking to get
every single transaction.
That's not who we are.
We're out for doing the best wecan for people that we really
(25:24):
fit with.
It is a bit of an exclusivesort of thing.
We have a lot of experience inhelping people downsize and I
really enjoy doing that.
We've spent two years now onthis podcast on downsizing, so
obviously there is a lot tothink about when you decide to
go that route.
Speaker 1 (25:44):
We have the resources .
We have access to kinds ofdifferent vendors that can help
you facilitate that process.
We built our business around it.
Help you facilitate thatprocess.
We built our business around it.
We are the experts ondownsizing in the Seattle metro
area and we'd love to help youif it's the right fit.
We don't turn away buyers likeI'm working with buyers right
(26:06):
now and we don't turn awaypeople who are relocation.
Speaker 2 (26:12):
It's very much about the relationship that we have
with our clients.
We don't care if you're afirst-time homebuyer, a
downsizer, a millionaire.
What we're looking for is agood, solid relationship where
we know the outcome for ourclients will be the best we can
provide.
Speaker 1 (26:30):
I worked in public education for 31 years.
If I was trying to make, Inever would have done that.
Speaker 2 (26:37):
It's too short not to enjoy it.
Speaker 1 (26:38):
Yeah, and that's what we want to do.
We want to enjoy our clients,get them the right help and make
this transaction as smooth aspossible so they can move with
the least amount of confusion.
Speaker 2 (26:52):
Disappointment, stress, anything else.
Judy Dennis, all right, pleasefeel free to reach out to us If
you have any questions.
There's no cost for answeringquestions.
Speaker 1 (27:04):
And we are, at wwwedgegroupteamcom, happy to
help you and take a look at ourother podcast episodes.
This is number 15.
So we do it biweekly.
So essentially we've done apodcast once a week over a year,
two years.
Over two years We've done ayear's worth of weekly podcasts.
Speaker 2 (27:28):
How old are you?
Speaker 1 (27:30):
52.
I just seem like 52 weeks in ayear.
We've done 52.
Yeah, wow, over two years.
Okay, that's it.
Thanks for watching.
We really appreciate it.
We'd love to hear from you andthanks, check out our YouTube
videos If you haven't seen thoseas well.
Thanks for watching.
Bye.
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