Local Market Update – July 2018

The local real estate market looks like it might finally be showing signs of softening, with inventory up and sales down. More sellers have opted to put their homes on the market. Inventory was up 47 percent in King County and price increases were in the single digits. Despite the increase in inventory and slowdown in sales, it’s still a solid seller’s market. Over half the properties purchased in June sold for more than list price.

Eastside

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A booming economy offered little price relief for buyers looking on the Eastside. In a recent study of economic strength by state, Washington ranked number one in the country. An additional report targeting cities ranks the Seattle-Bellevue-Tacoma market as the nation’s fourth strongest economy.  The median price of a single-family home on the Eastside rose 10 percent over a year ago to $977,759 setting another record. There is some good news for buyers. Inventory rose to its highest level in three years, with the number of homes for sale increasing 46 percent from the same time last year.

King County

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The number of homes on the market in King County soared 47 percent from a year ago, the biggest increase since the housing bubble burst. Despite the increase, there is just over one month of available inventory, far short of the four to six months that is considered a balanced market.  The median price of a single-family home increased 9 percent over last June to $715,000. That’s down 2 percent from the $726,275 median in May. Home prices haven’t dropped from May to June in King County since the last recession.

Seattle

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Seattle trails only Bay Area cities when it comes to greatest profits for home sellers.  That may help explain the surge in inventory in June. For example, the number of homes for sale in the popular Ballard/Green Lake area doubled from a year ago. Even though buyers are finally getting more choices, demand still exceeds supply. Homes sell faster in Seattle than in any other U.S. real estate market.  That demand propelled the median price of a single-family home to $812,500; up 8 percent over last June and down from the record $830,000 set in May.

Snohomish County

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The largest jump in home prices in the region came in Snohomish County. While higher-priced markets in King County are seeing increases slowing slightly, the median price of a single-family home here jumped 14 percent to $511,500, a new high for the county.  Buyers willing to “keep driving until they can afford it” are finding Snohomish County an appealing destination.

Home Inventory Jumps; Demand Stays Strong

Inventory Jumps

NEW NEWS: Inventory is finally up.

New listings and total home inventory took a big leap recently. In King County, more people put their homes on the market in May than any May in the past 10 years. And the total number of homes for sale increased by 40 percent from a year ago. Why the big leap? Home prices have risen so sharply that sellers are finally jumping into the market. That’s good news for buyers, who have more choices than they’ve had in years.

New Listings In 10 Years

OLD NEWS: There still aren’t enough homes to meet demand.

While King County now has about a month of available inventory, four to six months of inventory is considered a balanced market. Despite the increase in listings, it’s still a seller’s market.

Supply Falling Short

Whether you’re thinking about buying or selling, it’s important to have the most current information about the market. Contact one of our amazing brokers for recent statistics about the market today and to answer any questions you may have.

What to Expect From Property Taxes in Washington State in 2018-2019

Why have property taxes gone up so much in Washington State this year and what can we expect them to do in 2019? Windermere Chief Economist Matthew Gardner answers the question that many homeowners are asking.

This post originally appeared on the Windermere.com Blog.

Home Prices Hit New Records: Take Advantage Of Your Equity

The Great Recession took its toll on housing prices, with home values declining throughout the country.  Since then, prices have rebounded. While many areas of the U.S. are not back to pre-crash levels, home values in Washington State have increased significantly.

Homeowners here have the second highest appreciation rate in the country.

The economists at CoreLogic recently released a special report entitled Evaluating the Housing Market Since the Great Recession. In the five-year period from 2012 to 2017, home prices in Washington have appreciated 57 percent. The national average was 37.4 percent.
The map below was created to show the 5-year appreciation from December 2012 to December 2017 by state.

Take advantage of your increased home equity.

If you’re thinking about selling your home, now is an excellent time to take advantage of your sharp increase in equity. Today’s market very strongly favors sellers, so you can expect to get the best possible price for your property. It’s also not uncommon today for the buyer to accommodate your needs as you look for another home.

How Tax Reform Affects Homeowners…What You Need to Know!

House on a US tax form schedule A
New tax legislation was signed into law at the end of 2017, and it included some significant changes for homeowners. These changes took effect in 2018 and do not influence your 2017 taxes.  Here’s a brief overview of this year’s tax changes and how they may affect you.  
 
The amount of mortgage interest you can deduct has decreased.
 
Under the old law taxpayers could deduct the interest they paid on a mortgage of up to $1 million. The new law reduces the mortgage interest deduction from $1 million to $750,000.
These changes do not affect mortgages taken out before December 15, 2017.
 
The home equity loan deduction has been changed.
 
The IRS states that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labeled. The Tax Cuts and Jobs Act of 2017, enacted December 22, suspends the deduction for interest paid on home equity loans and lines of credit unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan. The deduction would be suspended from 2018 until 2026.
 
The property tax deduction is capped at $10,000.
 
Previously taxpayers could deduct all the state, local and foreign real estate taxes they paid with no cap on the amount. The new law limits the deduction for all state and local taxes – including income, sales, real estate, and personal property taxes – to $10,000.
 
The casualty loss deduction has been repealed.
 
Previously, homeowners could deduct unreimbursed casualty, disaster and theft losses on their property. That deduction has been repealed, with an exception for losses on property located in a federally declared disaster area – an important victory!
 
The capital gains exclusion remains unchanged.
 
Homeowners can continue to exclude up to $500,000 for joint filers or $250,000 for single filers for capital gains when selling their primary residence as long as they have lived in the home for two of the past five years. An earlier proposal would have increased that requirement to five out of the last eight years and phase out the exclusion for high-income households, but it was struck down.
 
   
How does tax reform affect your plans for buying or selling a home?
 
The changes in real estate related taxes may change your strategy. Contact one of our agents to go over your options and answer any questions you may have.