We are in a unique place in today’s housing market. Amidst the strongest seller’s market on record, there is great news for buyers, too. Purchasing a home is much more than just the investment, but we all would like to know we are also making a smart financial move.
Even with a great many homes coming to market, buyers still outnumber sellers. The result is swiftly rising home prices. Today’s buyers are paying on average 11.4% more for a home than a year ago. It can make one wonder if prices are peaking. There are several reasons buyers might look forward with continued optimism about rising prices.
- Pent-up Demand. Sales are at an all-time high and increasing. The last recession created huge pent up demand. It will take many years to fully unleash.
- Still Affordable. Even though prices rose 11.4% over last year, they’re still below historic trend lines. Combined with near record-low mortgage rates, there is great affordability in our area. Compared to surrounding counties to the north, our market is much more affordable. This will keep in-bound migration very strong.
- Lack of new construction. Our county is one of the fastest growing in Washington state and the United States. Construction of new housing for these in-bound residents is not keeping up. In fact, we are about 600-700 units short each year. It takes years to bring a new home community to market, and there is no sign that the pace of building will catch up any time soon. As a result, demand should outpace supply for many more years.
Actual outcomes are impossible to hit precisely, but these fundamental market observations suggest this is truly a unique point in time – when both buyers and sellers benefit from a seller’s market.
