It seems the local real estate market has come full circle over the past five years. From record high inventory and record low sold prices to record low inventory and home prices hitting levels not seen since the peak of the real estate bubble in 2007.
The Seattle area is booming. More people are moving to Washington for jobs. King County Growth Management keeps tabs on new home developments. Interest rates are still historically low. And the build out of Snoqualmie Ridge is almost complete thus diminishing the supply of new construction homes. It’s a “perfect storm” for rising home prices.
And something almost unprecedented happened in Snoqualmie Ridge in mid December…. inventory levels hit a new low – NO homes on the market. Zip. Zero. By month’s end there was one listing – a new construction home. [ Based on home listings in the NW Multiple Listing Service noted as ‘active’ – or not pending a sale.]
In North Bend and historic Snoqualmie, the stats were pretty similar, with a very low-level of homes for sale. North Bend had less than 20 residential properties for sale as of December 30th, with only two of those listed this month. Snoqualmie (outside of Ridge) had only four properties for sale.
Longtime Snoqualmie resident and John L Scott Real Estate agent Nancy Backman said inventory is at its lowest levels in more than a decade – and what’s happening within the 98065 zip code is consistent with what’s occurring in the overall King County real estate market.
Backman pointed to Snoqualmie Ridge market as an example. In November 2014 there were 55 homes for sale on the Ridge. By November 2015 that inventory dropped to just seven homes.
Overall, Nancy said the number of new listings added to the Northwest Multiple Listing Service (November 2014 – November 2015) was down 4.6% and the total number of active listings at month’s end was down 26.5%.
As far as prices go, in the 98065 zip code, they were up about 11% over the same, one-year time period, with the price per square foot at $194/ft. in November 2014 and rising to $218/ft. in November 2015.
According to Zillow this is similar to overall King County stats, which show the countywide median home price up about 10% this past year.
Zip Code 98065 Price per Square Foot Sold Price, 9/2014 -11/2015
So what does that mean for home prices in 2016?
Of course no one can predict the future of the local housing market, but Backman said “based on the combination of a great job market, intense demand for housing and virtually nonexistent supply” she would “expect sales and median home values to continue to rise in 2016.” Zillow predicts King County home prices will increase 5.7% in 2016.
Backman added, “If history repeats itself, the first 5 or 6 months of the year will be an extremely competitive market with multiple offers for sellers and a bit of a frustrating, stressful scenario for buyers, exacerbated by the total lack of inventory.”
She explained that with all of the recent positive news surrounding the Snoqualmie Valley, cities in the area are going to continue to be really desirable places to lives.
But what about rising interest rates? After all, the Federal Reserve recently raised rates and said it will continue to do so at a slow pace as the economy and inflation allow.
Backman said during the coming year she doesn’t anticipate the small movement of interest rates to have much impact, but rather sees buyer demand and low inventory as the driving forces to push prices higher.
She said while the current market can make it difficult for buyers, now is a good time for Snoqualmie Valley homeowners who have been thinking about selling to get top dollar. She warned, though, that given the low inventory levels, sellers will have to be patient and possibly be willing for rent for a while if they are looking to move up or downsize to a new home.
And yes, the Snoqualmie Valley rental market is also tight and rents have gone up just like home prices. For example, one downtown Snoqualmie home (3 bedroom, 1.5 bathroom) that rented for $1600/month in 2011 recently went for $1900/month.
2016 should be an interesting year in the Snoqualmie Valley.