Welcome 2018!

The new year is around the corner, and in just five days we’ll all have to concentrate extra hard when writing the date, as it will no longer be 2017. In fact, I have written the new year on every single page of my bullet journal for both January and February since I do tend to forget, but then again, I forget. When my child asked me in the car how old I was, I had to answer that I wasn’t quite sure. I have created a method to narrow it down though. I was born on an odd numbered year, so I knew that in 2017 my age, after my birthday would have to be an even number. It helps one decide if you would be unsure whether it is a 6 or a 7 after the double digits.

It is going to be the new year, but will we be getting a new real estate market too? Have we reached the top and things are finally starting to slow down? Are we going to reach the normal in 2018? What is the normal? Will the market crash? Will homes become more reachable for first time home buyers or will all that saving do nothing for you as the money you manage to put aside will be of little help as the home you were hoping to buy no longer costs 500K, but now has a price tag of 600K and you end up having less money for your down payment than the year prior. This has been the pattern lately, and most times it has been advisable to jump in with whatever you have instead of trying to save for that down payment unless you know you will have way more money in a year.  

Median Sales Price since 2006 - Eastside (Bellevue, Redmond, Mercer, Issaquah, Sammamish, Kirkland and Woodinville)

Looking at the entire areas of King, Pierce and Snohomish counties does not offer one much help. Even within King county we have areas that differ greatly from each other, and Pierce and Snohomish are different from King county in many ways. But even as whole prices have gone up and the inventory is getting skinnier even if zip codes 98004 and 98022 don’t have much else in common. 

What happens in 2018? I wish I knew. I really do. As of today, it looks like the market may be cooling of a bit, but is it really? Is it just the seasonal change, is it buyers getting tired and benching themselves or is it just everyone standing on their tippy toes hoping for something to happen? Later in the year we will have answers. It will all look like it was inevitable, but as of now we can only predict.

In the past few weeks I have had two buyers bench themselves. Do I understand their choice, yes. The current market is rough. Your options are quite limited and it is tough to settle for something entirely different from what you had on mind. Is it smart to decide to watch for another year. Most likely things will not be better in a year. They may end up being worse but it's easy for me to say as we built our home during the recession. 

Median Sales Price for Residential only.
Eastside +14.7%  ($815K to $935K)
King +14.8% ($540K to $620K)
Snohomish +6.9% ($478K to $511K)
Pierce +10.6% ($273K to $302K)

In all reality, if we look at patterns from similar cities, it’s not very likely housing will suddenly become affordable again. Maybe we will see less growth but 10% is still a lot of money when we talk about markets with median prices reaching 7 figures. Easy math… 10% on a 1 million buck home will make it 1,1 million and those rare affordable homes will likely be gaining way more than 10% as there is a great need for them. One has to remember that cooling of is not the same thing as homes becoming affordable, it only means that we would be growing slower that we did in 2017 and even in the unlikely event that it all stops and there will be no growth, we will still be living in an expensive market.

Median Sales Price for Condos only. 
Eastside +19.7%  ($345K to $413K)
King +13.2% ($325K to $368K)
Snohomish +56.1% ($230K to $359K)
Pierce +8.6% ($198K to $215K)

Will people choose to rent instead of buying? Seattle is already in top 5 for the nation when it comes to median rent and it does not look like the rents would be coming down, quite the opposite. Are we going to start seeing more and more of cross generational families, where you have three or more generations living in the same household? Are we going to see more of shared living? Maybe, and probably yes at some levels. In all honesty we are already seeing it.

It will be an interesting year ahead of us, as it has the true potential of giving us a glimpse of what lies ahead of us. Has the core of Seattle Eastside reached its peak? Is the growth going to slow down in Eastside? I would place my bets on the neighboring counties and south King county for getting the biggest growth in the coming year.