Getting Your Edge: How to Rightsize your Home and Life.
Life Happens to Everyone! These events can force changes in how and where you live. How you react and manage those events is what matters. Join Judy Gratton and Dennis Day, two agents with over 22 years combined experience in real estate, as they provide you insights into managing the twists and turns life throws at you, so you can land on your feet and in the right place. Whether you need to downsize from the forever home, upsize to handle a growing family, or moving an aging parent into a safer setting, the “Rightsizing” Podcast will share the information you need to “rightsize” your home and life. Using their personal experiences and interviews with experts in a variety of fields, like: financial planning, estate sales, or living abroad, our hosts will dish out the information and advice that will help you take on life’s challenges informed and prepared. For more information about the Edge Group Real Estate Team and the Freebies click here: https://edgegrouprealestateservices.com/
Getting Your Edge: How to Rightsize your Home and Life.
Hot or Not? An In Depth Look at Seattle Area Real Estate
Is the Seattle-Metro area real estate Hot? Or Not?
In this episode of 'Getting Your Edge: How to Right-Size, Your Home Life Podcast', hosts Dennis Day and Judy Gratton explore the Seattle metro area's real estate market. They discuss whether it's currently 'hot or not', key statistics from the Northwest MLS, and detailed trends in Snohomish, King, and Pierce Counties. Topics include median price changes, seasonal cycles, and inventory shortages. They highlight challenges like hedge funds, international investors, and short-term rentals impacting housing availability. Despite these issues, the area's robust economy and appeal persist. The episode also emphasizes their boutique real estate group's expertise in downsizing and client-centric services, inviting listeners to reach out for personalized assistance and explore their podcast and YouTube content.
Hello everyone. This is Dennis Day with Getting your Edge Out of Right Size your Home Alight Podcast. We are here today to discuss Seattle metro area real estate, hot or not. I'm with my co host, judy Gratton. Welcome, judy.
Speaker 2:Thank you, dennis, good to see you. We're also together for the first time in a long time. You see us looking up.
Speaker 1:I have some exciting news. My son wrote the first offer for his first purchase. They did not win. The winner was $70,000 over and no contingencies Pretty tough market. He is in the bull market, which is, I'm going to assume, the toughest out there. Really, yeah, at that price level.
Speaker 2:The lower the price, the more competitive the home, because we have a shortage of inventory in this area, especially in those starter pricing areas.
Speaker 1:When we say Seattle metro area, we're talking about three main counties Snohomish, king and Pierce County. King County includes Seattle. There are some outlying counties also included in the metro area. If you were in Skagit County, you say to friends in Paris, where are you from? Oh, I'm from Seattle. Everybody does right. I watch the Seahawks, the Mariners. It kind of revolves around Seattle, even if you live in the outlying areas. We're going to go into some stats about whether the housing market is hot or not. We're not using our intuition, we are going by statistics from the Northwest MLS, which is the MLS we are a part of. It covers most of the state. As an example, this is the entire MLS, which includes most of Washington, not all, and you can see that in those months we've gone up 13%, 13.4% in those months.
Speaker 2:I believe that the average appreciation by the end of the year was determined to be closer to 19%. Oh no, that's 2019.
Speaker 1:We'll get there. Here is an entire MLS in King County King County is the location we spend most of our time in or Snohomish County. Here is the bottom of the entire MLS. We've got a year over year 5% versus a 10% King County. We're going up. Now let's talk about median. What is median?
Speaker 2:Median is halfway between the least expensive property and the most expensive property.
Speaker 1:It is just halfway between the two and that can be different than the average price. I like the median because it's more accurate and it doesn't get skewed by wild swings in massively enormous expensive properties. Versus the median you know that half are above and half are below that price. Here we have Seattle, king County and Stomachat. We're looking big raises in those months. If we cut off here at the first, we can see that prices are rising in all three of these markets.
Speaker 2:It's interesting when you look at Seattle and see a growth rate of 10.9%. During the COVID years the Seattle market went down significantly. People, when they couldn't leave their homes, wanted yards and started moving into the surrounding suburbs and leaving the Seattle area. It's good to see that Seattle is coming back up and at this point is the highest in terms of medium price range.
Speaker 1:The closer you get to Seattle from outlying areas, the more expensive your housing becomes.
Speaker 2:Yes, and that was true even with the suburbs. Bellevue would be another place that would be heavily weighted in terms of there was a lot of business in those areas. The people that work in those businesses want to live as close as possible to where they work, Even though they move to what is considered suburbs in this area. They tried to stay as close to Seattle as they could and still get a calm on a lot. That gave them more room.
Speaker 1:Here we go. We've got Snohomish County, seattle, the entire MLS and King County. Prices are generally rising. Here is the cutoff for the year.
Speaker 2:So you did see a little bit of a dip, and that's not unusual in the beginning of a year. When you're looking at January, that's the slowest time of our market, based on seasonality, which we're a very seasonal market here, because of the weather, which we're a very seasonal market here.
Speaker 1:because of the weather, I wanted to put a little break in here. So this is September 23 and September 24. So we've got these spikes, dips and a movement up another little spike. You can see the kind of up and down, but generally we are above the September 2023 prices in all the markets. The entire MLS doesn't seem to grow near as fast.
Speaker 2:Because you're incorporating farmland and really small towns that are a long way away from any metro area. So those do grow more slowly and at a lower rate because population is going to grow fastest and largest around those metropolitan areas where people work.
Speaker 1:Well, next slide. Do you see the change? All right, we've got median percent of last original price. So one of the indicators of a hot, cold or medium market is our people who list their home for sale getting 100 percent above 100 percent below 100 percent in the asking price. And you can see it's kind of a wild little bump there.
Speaker 2:And it has evened out.
Speaker 1:Right.
Speaker 2:And these are the kind of things that we look at when someone asks us to help determine the value of their home. We go in and look at these stats to see what the market is doing in that area and what we could anticipate. If you look back, just after January of 2024, there was a real spike up for Snohomish County. Now it's back at 100%. If you put a home on the market and it's priced well, priced according to the condition that it's in, priced according to what the homes around it have sold for, then you could anticipate 100% of the asking price in most cases.
Speaker 1:Now, even though it's not 100%, we're looking at 99.2 or 98.4 for the entire. That's pretty close to your asking price.
Speaker 2:It's still close to the asking price.
Speaker 1:We had a dip right around January and then it took a spike, but for the most part you can see it's pretty level at 100 percent.
Speaker 2:You're in the slowest time of the market. Where that dip is, it's cold and normally rainy or maybe even snowy. In this area, People have holidays and they're not moving. The people that do move have a better opportunity of making an offer on a home that's lower than asking and getting it, but even then again, it's still in the what 90-something range.
Speaker 1:All right, here's our market update for King County and Snohomish County. Prices are up. Listings are up.
Speaker 2:That's a good thing, because for a while now we haven't had any listings because people didn't know where they were going to go and interest rates were higher.
Speaker 1:They've come down a bit closed sales are up days on the market, so how many days until your kong comes under contract is down. The percent of original price is hovering right around. To me that's a pretty strong market.
Speaker 2:It's a strong market.
Speaker 1:It may not be like it was way in the 22. Yeah.
Speaker 2:Even during COVID, the market was insane because the feds lowered the interest rates so much. We had a lot of business during that period of time. It's funny because you can look at dates where the interest rates started to rise. I believe it was June of 2020. You started to see things slow down because fewer people were buying. The interest rates were going up that they're coming back down. That's part of what will spur the market on.
Speaker 1:Let's talk about the real estate market cycle.
Speaker 2:Yes.
Speaker 1:Because there is a predictable pattern to the real estate market. Yep, and you see the up and down and up and down. That is the cycle. There are a few aberrations here and there, but in January the market is low.
Speaker 2:Lowest amount of inventory. Lowest amount of buyers.
Speaker 1:And then you get into September, april, may and June and we're peaking.
Speaker 2:And that's where your appreciation is. Homes appreciate during those first months of spring. Then they kind of level off in the summer months. So if you want to get a higher price for your home, putting it on the market in late April, may, early part of June, you're probably going to see the most appreciation during that period of time.
Speaker 1:And there is a little bit of a lag because get a under contract and then it's really not until 30 days or so until you close and the statistics come up in the MLS. So if the peak is in June, that means most of the sales are taking place in June.
Speaker 2:Well, yes, that's true. Unfortunately, because they have to collect and look at all the data, these reports are generally 30 days behind. So when we're coming up on November, we will be looking first part of October, around the 15th of the month.
Speaker 1:There's a definite cycle. The best time to sell for the top dollar is Early summer yeah. And then in August we get a dip because people are on vacation getting ready to get their kids back to school. They're trying to squeeze in that last little bit of yard work, so forth. So August tends to be a little bit slower, but after late September, early October, we have a bit. We have a bit Surge. Now, does that mean you can't sell your home in November or December? No, january no.
Speaker 2:No, because people that are out and looking in that period of time are very serious buyers. When you're in the summer months you could have a lot of people who are just driving around seeing an open house, think it'd be fun to look at properties, not really committed to buying. But when they're looking in the winter months they are very committed to buying and so the people that do come through your home may be fewer, but they're much more serious buyers.
Speaker 1:This is an indication of the long-term health of the Seattle metro area market. You can see in 2014, prices are in the 400s for the entire MLS, below 300. And what's happened in 10 years? If you had purchased a home in Seattle right around $400,000 in 2014, you would have had growth of 100% or 11% Appreciation, or the money that your home is now worth. Now, if I was in stocks and bonds or some other kind of investment, that's a pretty darn good return. It really is. You get to live in the house.
Speaker 2:We have a lot of people out there buying homes that they're not living in, and that is part of the reason that first-time homebuyers are having such a hard time. We have hedge funds that have been investing in real estate since 2012, when the JOBS Act came into play. Last year, they purchased 26% of all the real estate that was sold in the United States. They hold them as rentals. They're not very good landlords, they don't take very good care of the property and they charge an awful lot of rent for them.
Speaker 2:Then you have out of country investors doing very much the same thing, because our economy is so strong Even if you don't see it right at this moment, it's the strongest economy in the world right now and then you have this Airbnb thing. Everybody wants to invest in a property somewhere where maybe they would like to visit occasionally and make money off of. It hurt the inventory, not to mention the fact that builders haven't been building as much because interest rates were high for them as well. We are hoping that they will start building as the interest rates come down, and I know for a fact that one of the congressmen from Washington state, adam Smith, is trying to get a bill before Congress to get hedge funds out of real estate. This is not good for American homeowners.
Speaker 1:It's great for these multi-million dollar investors, but destroys the housing stock.
Speaker 2:A lot of cities are now putting moratoriums on air. They're not allowing them, they're requiring permits and neighbors aren't too crazy when they see them come into a neighborhood. So I think those happens at resort communities and people buy places to rent with VRBO or Airbnb.
Speaker 1:They raise the prices dramatically on housing and the people who work at those resorts the ski lift operators, the waitress, the cashier at the gift shop have no place to live because it's just too expensive and their wages don't cover the cost of that rent. It's a real problem. I don't have a fast solution. I know several resort communities around Seattle are putting moratoriums on short-term rentals and they are talking about limiting the number within a city or a community. Decrease the number of homes available for people to buy. This is a huge problem in Victoria, Vancouver, San Francisco, New York, all over. It's a big problem. Let's get back to the graph there. I just want to say that I understand housing is extremely expensive in the Seattle area compared to other parts of the country, but if you can get in, you're going to earn equity. It will be a good investment. We haven't had a bottom out since 2014.
Speaker 2:2014 really wasn't a bottom out. It was still good real estate. It's just the prices were so much lower than they are now. Where we had the real bottom out was when the economy crashed in the early 2000s. At that point in time, homes did lose about half their value. There were people who were forced to sell. There were people who looked at that as a business decision and said. There were people who looked at that as a business decision and said I'm underwater in this, it's not a good investment. They short where they owed more money to the really big problem in our country and it is driving prices down and generally most people won't have the money to buy those lower-priced homes at that point in time. Who comes in and buys those lower-priced homes are things like hedge funds. That's a perfect time to buy if you've got the money. Hopefully we're not going to see another one of those catastrophes in the near future. During COVID, a worldwide catastrophe, our government said let's lower the interest rates to keep our economy afloat.
Speaker 1:It's been a lifetime. We hope Not going to happen again. Good investment in CO. All right, let's look at the mortgage rate 73 to 2020. Oh, we had some bad years in the late 70s, early 80s.
Speaker 2:They were up in the 20% and people still bought real estate, but they were very high.
Speaker 1:Yeah, it was a tough market to sell and again, that was just going nuts. The Fed put a huge block on, essentially created a recession in order to combat inflation. Hopefully we won't have to do that drastic.
Speaker 2:Well, what we're seeing is that we are pulling out of the inflation at this point in time.
Speaker 1:Yeah, so you see the bottom of those interest rates in 2001, 2.96. 2.21. Oh, I got new glasses or new eyes. We're not going to see that, are we?
Speaker 2:Not unless you have an emergency. And generally, other things don't line up to make that a positive experience.
Speaker 1:I talked to Trevor Robert Capstone on Monday. He said interest rates were rising. The Fed dropped to the rate for banking but there's concern about the get elected. They had a very good jobs market report in September or August. Some conspiracy theorists claim they pledged it so somebody else could win. Interest rates have crept up a bit. Bison said they're looking at between 6.4 to 6.8 percent interest.
Speaker 2:When the Fed drops the rate, that does not necessarily match what you see as a mortgage interest rate, because our mortgage rates are tied to the bond market. When people feel uncertain about the stock market, they take their money out of the stock market and buy bonds. When they buy bonds, interest rates come down, and when they put their money back in the stock market and fewer people are buying bonds, interest rates go up. Right now, the stock market is at highs. They've never been as high as they are now, ever. So the stock market for right now. Who knows what happens, especially next month? But for right now, the stock market, bond market is probably not as good. I haven't looked at it, that's not really my area of expertise, but interest rates creep back up when the bond market goes down.
Speaker 1:Part of the issue here is that extremely low interest rates from 2019 to 2021 below 4% and even below 3%, was a catastrophe, a pandemic, a once in a hundred year event. And 6.8 seems enormously high and for a first time buyer, from 3% to 6.8, you're more than doubling your payment per month.
Speaker 2:And you're cutting in half the amount that you can actually purchase, because you qualify based on what you can pay. So if you are paying more for less purchase, then you're not going to be able to buy as much.
Speaker 1:Alrighty, that's it for our special. What's going on here? Stop sharing. I said, stop sharing. It did, oh my God, go around. Can you balance my checkbook please? Okay, in my opinion, the Seattle metro area market is still going strong.
Speaker 2:It is.
Speaker 1:It's hot. I mean we were seeing in Snohomish County 20 percent, 24 percent 2019.
Speaker 2:Prices and prices Appreciation was 19 something in 2019 and 2020. It just went off the rails when the interest rates dropped and it was going like that until the interest rates came back up and then you could see it starting to come back down a little bit of an adjustment and people move here because they see lower-priced homes in other parts of the country, which is true. We're a beautiful state, absolutely beautiful. We have lots of areas that people would like to retire to. We have lots of arts, lots of reasons that people would love to live here, and then we have technology and Boeing that drive even more people to come into the state all over the world and that just drives the prices up. Every time your neighbor's home sells, it's going to change the value of your home. So as they're driving up, it's cutting more and more people out. I don't ever want to leave Washington because it's my favorite place and I feel if I do, I'll never get back in again because the prices, unless we have a major catastrophe, they're going to stay around where they are right now.
Speaker 2:When I bought my home, we paid, I think, $130,000 for it in Bothell and that was an average price for a middle-class home in Bothell. The average price for a middle-class home in Bothell now is a million. I used to talk in hundreds, then 300,000, then 500,000. Now I'm talking in a million. People also earn more money generally. In 1900, you could buy a cookie for a penny. You can't anymore. We've had a little unnatural inflation here, but it's probably not going to go down a lot.
Speaker 1:It's interesting that you would think that with the drastic rise in interest rates, that prices in holes would come down.
Speaker 2:They do a little.
Speaker 1:Yeah.
Speaker 2:You saw that they do a little In a good, healthy market. In Washington state, normal appreciation is somewhere between 4% and 7% every year. That's good growth. The craziness is when we don't have enough inventory, why do we have a shortage of houses? Especially not during COVID. Nobody was building and people were moving out to the suburbs like crazy. And then you have unusual buyers like hedge funds and international buyers coming in to invest in residential real estate from the standpoint of holding onto it because it appreciates, and then renting it out and then, especially when we had a shortage of rentals as well, driving up the rental prices until that stops, until those things do some sort of a correction. We're trying I mean everybody is trying to think of ways to build more houses. We have more people on this fly lane, so we need more houses.
Speaker 1:Yeah, not an easy one to solve, judy. Let's talk about our business and how we can help people. We've pointed out that we don't rely on our intuition to make decisions about what type of market we use, the facts and so forth. We are a boutique real estate group here a boutique real estate group here.
Speaker 2:I believe it's very important that there is a good relationship between the person representing you and you, so we choose to work only with people there's a really good relationship. If it feels forced or difficult, we're not out looking to get every single transaction. That's not who we are. We're out for doing the best we can for people that we really fit with. It is a bit of an exclusive sort of thing. We have a lot of experience in helping people downsize and I really enjoy doing that. We've spent two years now on this podcast on downsizing, so obviously there is a lot to think about when you decide to go that route.
Speaker 1:We have the resources. We have access to kinds of different vendors that can help you facilitate that process. We built our business around it. Help you facilitate that process. We built our business around it. We are the experts on downsizing in the Seattle metro area and we'd love to help you if it's the right fit. We don't turn away buyers like I'm working with buyers right now and we don't turn away people who are relocation.
Speaker 2:It's very much about the relationship that we have with our clients. We don't care if you're a first-time homebuyer, a downsizer, a millionaire. What we're looking for is a good, solid relationship where we know the outcome for our clients will be the best we can provide.
Speaker 1:I worked in public education for 31 years. If I was trying to make, I never would have done that.
Speaker 2:It's too short not to enjoy it.
Speaker 1:Yeah, and that's what we want to do. We want to enjoy our clients, get them the right help and make this transaction as smooth as possible so they can move with the least amount of confusion.
Speaker 2:Disappointment, stress, anything else. Judy Dennis, all right, please feel free to reach out to us If you have any questions. There's no cost for answering questions.
Speaker 1:And we are, at wwwedgegroupteamcom, happy to help you and take a look at our other podcast episodes. This is number 15. So we do it biweekly. So essentially we've done a podcast once a week over a year, two years. Over two years We've done a year's worth of weekly podcasts.
Speaker 2:How old are you?
Speaker 1:52. I just seem like 52 weeks in a year. We've done 52. Yeah, wow, over two years. Okay, that's it. Thanks for watching. We really appreciate it. We'd love to hear from you and thanks, check out our YouTube videos If you haven't seen those as well. Thanks for watching. Bye.
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