Business |
July 6, 1998 |
Real Estate
Hot Market Cools a Bit
July 6, 1998
Tim Baker's column appears regularly in the Seattle Press.
Buying or selling a house is one of the most important things most people do in their lives. Starting this month, I'll be writing a regular column about the latest trends in sales, prices, interest rates and other key factors you need to know about if you are buying or selling a house.
Got a question about your house or neighborhood? Write or e-mail me at The Seattle Press. I'll do my best to answer it for you.
While everyone talks about this being a "seller's market," and that's true, it's also a "buyer's market." Interest rates for buyers are the lowest they have been in years and that allows for greater purchasing power. For example, if you lock into a loan at 6.5 percent, and pay a monthly mortgage of around $1100, you could qualify for a $148,000 home with a minimum down payment of 3 percent (approximate figures). If the interest rate goes up to 8 percent, then you could only qualify for a $127,000 home using the same parameters. Mortage brokers I talk to say that rates will more likely go up than down, so if you wait for the market to "cool," you could miss out on buying the home you desire, since housing prices are going nowhere but up.
Recent trends do show a slight slowdown in the market, except for a few neighborhoods. I suspect that's because there are more homes on the market, allowing buyers greater choices. With more choices, buyers are less likely to enter into the bidding wars that we saw so much of in the late winter and spring months this year. In March, it was common to have 10-12 offers per home. In June, we were commonly seeing only 1-2 offers per home. I believe this was because the earlier bidding wars escalated home prices so much, so quickly, that many buyers were priced out of the market. I guess war is hell even in real estate.
In the last week of June, there were slightly over 1,000 houses and condos available in N. Seattle, Magnolia and Queen Anne. The closer to downtown, the more popular the neighborhood, thus resulting in higher prices. Quite a change from a few years ago when people were trying to move away from the central city. Is traffic congestion "driving" this trend? I think so!
From mid-May to mid-June, 433 houses and condos sold in N. Seattle, Queen Anne and Magnolia. The average selling price for a house in those areas was $271,000, selling in 13 days, while condos averaged $180,000, selling in 59 days (source NWMLS).
Next month, I'll talk about tips on buying and selling homes, plus the latest on recent home sales. In later editions, I'll add a "don't do this!" to my column.
Got a question about your house or neighborhood? Write or e-mail me at The Seattle Press. I'll do my best to answer it for you.
While everyone talks about this being a "seller's market," and that's true, it's also a "buyer's market." Interest rates for buyers are the lowest they have been in years and that allows for greater purchasing power. For example, if you lock into a loan at 6.5 percent, and pay a monthly mortgage of around $1100, you could qualify for a $148,000 home with a minimum down payment of 3 percent (approximate figures). If the interest rate goes up to 8 percent, then you could only qualify for a $127,000 home using the same parameters. Mortage brokers I talk to say that rates will more likely go up than down, so if you wait for the market to "cool," you could miss out on buying the home you desire, since housing prices are going nowhere but up.
Recent trends do show a slight slowdown in the market, except for a few neighborhoods. I suspect that's because there are more homes on the market, allowing buyers greater choices. With more choices, buyers are less likely to enter into the bidding wars that we saw so much of in the late winter and spring months this year. In March, it was common to have 10-12 offers per home. In June, we were commonly seeing only 1-2 offers per home. I believe this was because the earlier bidding wars escalated home prices so much, so quickly, that many buyers were priced out of the market. I guess war is hell even in real estate.
In the last week of June, there were slightly over 1,000 houses and condos available in N. Seattle, Magnolia and Queen Anne. The closer to downtown, the more popular the neighborhood, thus resulting in higher prices. Quite a change from a few years ago when people were trying to move away from the central city. Is traffic congestion "driving" this trend? I think so!
From mid-May to mid-June, 433 houses and condos sold in N. Seattle, Queen Anne and Magnolia. The average selling price for a house in those areas was $271,000, selling in 13 days, while condos averaged $180,000, selling in 59 days (source NWMLS).
Next month, I'll talk about tips on buying and selling homes, plus the latest on recent home sales. In later editions, I'll add a "don't do this!" to my column.