The Seattle-area housing market has remained strong throughout the coronavirus pandemic, with many homes receiving multiple offers and driving up home prices.
The market has made it challenging for buyers, who have to balance little inventory and a lot of competition.
- Median prices rising by double digits across most of our counties.
- Total active listings of single-family homes declined nearly 44% from a year ago.
- We are virtually sold out of unsold inventory everywhere in the Central Puget Sound area except the Seattle city core.
- Continuing low interest rates, jobs, and lifestyle changes are driving the real estate market.
In particular on the Eastside and surrounding areas who are met with an additional influx of people moving out of Seattle Proper.
Seattle may not be dying, as the saying goes. But it could be doing something we haven’t seen in decades around here: shrinking.
Whether it was the pandemic, the protests and riots, the urban decay, the high costs, the work-from-home trend or pick your reason, people appear to have ditched the Emerald City last year in unusually large numbers, new data shows.
But they aren’t going far…. The number of households filing change-of-address requests to move into Seattle was about the same as it was in 2019. But the number leaving the city limits soared, by 36%.
In all, 43,350 households requested moves into the city in 2020, and 69,432 moved out. That means the net migration out of the city was more than 26,000 households. In a city with about 351,000 households, that’s a big change, a potential decline of 7%. It’s how you get 12-weeks-free deals for apartments.
The top 10 destinations for Seattle leavers, measured by “net migration,” were all within 35 miles. No. 1 was Bellevue. According to the USPS, 3,521 Seattle households decamped to Bellevue in 2020, while 1,941 Bellevue households moved into Seattle. The difference, or net migration, is a 1,580-household shift from Seattle to Bellevue.
That’s triple what the shift across the lake was in 2019.
In all, Seattle lost a net of nearly 10,000 households in 2020 to the suburban crescent of Bellevue, Shoreline, Kirkland, Bothell, Lynnwood, Renton, Redmond, Edmonds and Kent. More than 1,700 Seattle households moved to Tacoma, with about 1,000 moving the other way, for a net shift to Tacoma of 700 households.
Adding more fuel to the fire: Mortgage rates are creeping up and increasing the sense of urgency to lock in a low rate now!
New surveys show mortgage rates have spiked to their highest levels since at least last summer, if not more than a year. And the journey skyward seems far from over.
"The rebound in business activity is ensuring that mortgage rates will continue higher this year. For buyers and sellers, the shift will mean higher financing costs," says Danielle Hale, chief economist with Realtor.com.
Data on mortgage applications shows the higher rates have largely sent borrowers into hibernation — but experts say that's the wrong move if you're looking to buy a home or refinance an existing home loan, to cut your monthly mortgage payment.
Because today's rates could look extremely cheap before long.
The average rate for a 30-year fixed mortgage crept up last week to 3.05%, according to the 50-year-old survey from Freddie Mac.
Rates rose from an average of 3.02% previous week and reached their highest point since July 2020, the government-sponsored mortgage giant reported on Thursday.
Other surveys are reporting even higher averages. The Mortgage Bankers Association, or MBA, last week said it found the typical 30-year fixed mortgage was now going for 3.26%, and Mortgage News Daily on Friday reported that rates on 30-year loans had jumped to an average 3.32% — the steepest in a year.
Mortgage rates are rising sharply as investors grow more and more optimistic about the economy recovery, explains Matthew Graham, chief operating officer of Mortgage News Daily.
"The acceleration in 2021 is all about increased vaccine distribution, sharp declines in case counts, and the passage of more COVID-relief stimulus," Graham writes.
According to a new report from Zillow, it might make sense for buyers to act now — even in a competitive market. It could save people hundreds on their monthly mortgage payments if they move quickly, the report found, as experts predict home values and interest rates will rise.
“The best time to buy a home should always be when it’s the right time for your family. However, home shoppers would be wise to gather as much information as possible and use it to make smart decisions that maximize their buying power,” Zillow Home Trends Expert Amanda Pendleton said in a news release.
“For someone ready to buy, jumping in sooner rather than later could mean a savings of hundreds of dollars a month. Or, more likely, it could mean having to make fewer tradeoffs to stay within budget.”
The report found the typical monthly mortgage payment for people in Seattle with an average mortgage rate of 2.68% and typical home value of $586,162 was about $1,897 a month. The report looks at monthly payments based on a 30-year fixed mortgage and 20% down payment.
If home values continue to rise, along with interest rates, that monthly payment could be far more, though, according to the analysis.
It found if home values go up 8% and interest rates reach 3%, the same house could cost $2,135 a month. If home values go up a little more, 12%, the typical monthly mortgage payment could rise all the way to $2,214.
And if interest rates rise to 3.5%, the average monthly payment for a home could get to between $2,274 and $2,358 — if home values increased between 8% and 12%.
"2020 was a remarkable year for the housing market, and much of that momentum is expected to continue pushing the market in 2021."
According to Zillow, home values across the country will likely rise by about 10.5% during 2021. Zillow is also expecting mortgage rates to start to rise as restrictions across the country are lifted and vaccinations continue.
Experts expect the same to be true in Seattle, which has seen homes flying off the market throughout 2020. The pandemic has not appearing to deter buyers in Seattle, which have had to navigate a market all year long with low inventory and high demand. Low interest rates have also allowed homebuyers to stretch their budgets further.
"But just because currently low rates are helping keep payments manageable doesn’t mean the current status quo will be the case forever," the report said. "Home affordability is based on a number of factors — incomes, home value levels and growth, and interest rates themselves — which all can and do change rapidly over the course of a year."