Snohomish County Real Estate Market Report for January and 5 predictions for 2020
What happened in the last month in Snohomish County and where is the market at?
This is of course the question everyone's asking us right now, so let’s see some points and 5 predictions for the housing market in 2020:
The sales price
The number one data point that we look at each month, we're at $538,000 in Snohomish County, it's an increase of about 2% year over year. So gone are the days of the double digit increases. It's normalizing out to that historical average of two or 3%, it's very good. It's a strong number. It's not down, so that's a great sign for everyone that's owning a home right now or that's thinking about buying a home because the prices aren't continuing to just skyrocket.
The new listings
New listings are actually down about 2%, so there's less listings this time of year than there was at the same time last year. Just means there's less to look at. Homes for sale is dead flat, so there's about the same amount of properties that are on the market right now. Whereas the new listings are the ones that are coming on the market. Days on market, so how long does it take to sell a home when it first comes on the market to when they accept an offer? Right now we're on a 31 day average, so that's about an increase of 24% year over year. Meaning homes are sitting longer, especially about $500,000. If you've got a home that's in those higher price points, you can expect it to sit for 30 to 60 days, possibly. You want to make sure you price it right.
In the $400,000 and less price point, we're seeing homes sell in a day or two and you got to move fast if you're in those price ranges. So the days on market really does depend on which price range you're buying in. And then the months of inventory supply. So if no more homes came on the market after today, how long would it take to sell every home that's currently on the market? We're about 1.6 months of inventory supply right now. It's an increase of 6% year over year. Remember, most economists agree that a six month inventory supply is a neutral market, so we're still heavily in favor of the seller, but it is changing in particular in those higher price points. In the lower price points, the inventory level is really, really, really low, as many of our clients have experienced in November and December.
5 predictions for the housing market in Snohomish and King County in 2020
This is hyperlocal that we're talking about right here, so it's important that I make sure you understand that.
The first one, first time home buyers will be out in force this year. There's a lot of first time home buyers, people in their 20's and early 30's that are tired of renting and they want to make home ownership happen.
The second one, high rents will push more people to purchase. A lot of people are paying 2000 to $2,500 a month in rent. If that is you, you definitely want to look at possibly buying a home. You can own a great home for $2,500 a month and those higher rents are pushing people into purchasing a home for sure.
The third prediction I've got for you is the zero down loan programs will continue to be leveraged. There's at least three different ways to buy a home with zero down. There's VA, there's state bond, there's USDA, all great different loan programs. These are really designed to help people get in a home for very little money out of pocket and to help make that transition from renting to home ownership. I predict that they're going to be heavily leveraged in 2020. These are great loan programs. Take advantage of them if you don't have a down payment saved up and don't wait to save that down payment to get into the market, home prices will just keep going up.
The fourth prediction I have for you is that multigenerational living will continue to increase as prices go higher. We're seeing more parents moving in with the kids so they can afford that six or $700,000 home instead of both of them going out and buying a $400,000 home. I predict that multigenerational living will continue to increase as the home prices go up. In particular in Seattle where the average price is above $800,000. It's very difficult to afford a home on your own. This is one of the ways that people are breaking those prices and splitting it kind of in half.
The fifth and final prediction I've got for you is that inventory will stay very, very low below $400,000. So above 400, I think it's going to keep increasing, but below 400 it's going to be really competitive out there. You've got to really have your ducks in a row if you're shopping in that price range, and I predict that for the rest of 2020 we will see historically low inventory levels in those lower price points. But again, in the higher price points, it's going to probably continue to climb.
So those are my five predictions for you for 2020. We will see if they come true or not. If you've got questions about any of those predictions or about what is going on in our market or want to know what your current home's value might be right now, reach out to me. Send me a message or give me a text.