Trends For Puget Sound Real Estate – September 2013

Commercial Investments Rise 24% in 1st half of 2013 – Sales of major properties (over $2M) advanced 24% on a yearly basis during the first half of this year, totaling $145.3 billion, based on Real Capital Analytics (RCA) data.
– Most property types registered double-digit growth rates, signaling strong investor interest in commercial assets.  Based on National Association of REALTORS data, sales of properties at the lower end of the price range (mostly below $2M) increased 12% on a yearly basis
– Portfolio sales made up a significant part of transactions in the first half of the year, with Archstones’s sale of apartment properties accounting for over $14 billion of the total.
– Hotels were another major component of the top portfolio transactions.
– On the individual property side, the General Motors building in New York ranked at the top, selling for $1.3 billion, at $1,766 per square foot.
– Office properties made up the top three, with Sony Plaza and 425 Lexington Avenue, both in New York, coming in second and third place.
– In line with growing demand for properties, prices rose 8% on a yearly basis, according to RCA’s Commercial Property Price Index.
– Prices rose the most for apartments (15%) and retail buildings (13%).  The average apartment unit price reached $108,347.
Retail spaces commanded $166 per square foot.  Office building traded for an average of $212 per square foot, up 7% year-over-year.  Industrial properties posted average prices of $63 per square foot, a 5% decline from a year ago.
– Cap rates inched up 17 basis points, to an average 7% nationally across all property types.
– For lower priced properties (below $2M), prices increased 2% year-over-year.

Builders Raising Prices, Limiting Supply
– Those looking to buy new homes will likely start to see price hikes, and possibly a smaller selection.
– Many of the nation’s builders say they’ve had to increase prices due to the rising costs of land, labor and materials.
– For example, Pulte’s sale price, on average, has increased 10% to $287,000 in the first quarter of this year.  Meanwhile, the average existing home price was $233,200 in March, according to the National Association of REALTORS.
– Some builders are limiting sales in order to keep prices higher.
– “We are pricing our homes and limiting the number of lots we’re releasing for sale in some communities to better manage our order volumes relative to our production capacity, and to maximize our profit from those communities.

Home Prices Edge Closer to Pre-Crash Levels
– The housing market is inching closer to what it once was:  Home prices are now within 15.2% nationally from their peak, according to a new report by Lending Processing Services.
– The LPS price index rose in June to $229,000, up 6.9% from last year’s levels.  In June 2006, the peak was $270,000.

Singles Make Up Quarter of All Buyers
– More Americans are opting to live alone, with single buyers making up a quarter of all home purchases last year, according to the National Association of REALTORS.
– In the U.S., there are 33 million one-person households, and living solo is becoming an international trend, MSN Real Estate reports.
– Why are so many living alone?  People are marrying later, divorcing more, and living longer, sociologists says that young adults ages 18 to 34 are the fastest-growing group of people living alone.
Solo households are also mostly women: 18 million women live alone versus 14 million men.  The majority of solo households are in cities and metro areas.

Demand for Puget Sound Area Homes “still incredibly strong”, But Brokers Report Frenzy Is Easing In Some Neighborhoods
– Northwest Multiple Listing Service figures for August show brisk sales, escalating prices and some improvement in inventory, prompting one MLS director to declare, “What these numbers tell us loud and clear is that buyer demand in the Puget Sound region is still incredibly strong.”
– The housing market tends to experience some slowing during August, but rising inventory levels and sustained buyer demand fueled “higher than expected home sales and another month of strong appreciation.”
– The latest figures from Northwest MLS show pending sales (mutually accepted offers) during August increased 8.7% from a year ago.  Brokers in the 21 counties served by the MLS reported 9,065 pending sales system-wide.
– That’s a drop of 500 units from July, but an increase of 727 transactions compared to year ago (August 2012).  In the four-county Puget Sound region (King, Kitsap, Pierce, and Snohomish), the total of 6,916 pending sales was the highest volume for August since 2006 when members notched 7,692 sales.
– Prices also reflected an upward trajectory.  The area-wide media price for last month’s completed sales of single family homes and condominiums was $283,000, which compares to the year ago figure of $250,000 for a gain of 13.2%.
– Only two other months this year have had higher year-over-year increases: March (14.9%) and May (13.4%).  Since January prices have jumped 18.3%.
– Prices on single family homes (excluding condos) that sold during August increased from $263,495 to $294,000 for a gain of 11.6%.
– An analysis shows King County median prices for August ($392,500, including single family homes and condos) are at 92.4% of the peak price of $425,000, set in July 2007.  We credit a surge in sales activity and a shortage of homes for sale as primary drivers of spiking prices during the past two years.
– We have seen 22 straight months of strong-surge sales activity, job growth, pent up demand by local home buyers, residential investors, incoming transferees, a strong local economy and historically low interest rates have led the way during this recovery phase of the residential housing market.
– The Kitsap District noted prices in Kitsap County have not spiked as much as some other areas during this recovery period.  For sales in that county that closed during August, prices rose slightly more than 3% compared to a year ago.
– Since recovery should be a long-term return to normalcy, there seems to be a bit more sanity in Kitsap.
– Despite moderate price gains in Kitsap County, buyers were active, with year-over-year pending sales jumping 19.7%.
– Inventory is showing signs of stabilizing in many Western Washington areas, with members adding nearly 1,800 more new listings to the MLS database during August compared to the same month a year ago.
– With that 21% increase in new listings, the total number of active listings at month end (26,433) was almost on par with a year ago with the selection encompassed 26,506 homes for sale.
– We have noticed some key indicators are trending lower or slower as the market adjusts to a “new normal”
– Inventory shortages are still common in many parts of King County.
– MLS figures show of 22 of the 29 map areas it tracks in King County had fewer listings at the end of August than at the same time a year ago.
– Many industry-watchers predicted rising interest rates would slow down the market.  “Well, it has not, because despite jumps in prices and interest rates, homes are still more affordable than they have been in decades”.
– Buyers are on “heightened alert” because of the recent upward movement in interest rates.  We don’t expect interest rates to stay as low as they are today and prices in our area are expected to continue to rise.  For anyone who is thinking of buying, now is the time.
– The current market “the strongest in four or five years,” with signs of stability that should continue into 2014
– If a buyer finds the home of their dreams, they should make their first offer their best offer or risk losing that home.
– Advice to sellers who have unrealistic expectations.  “Sellers should still be concerned about overpricing their homes”.  Some markets may handle the overpricing, others will not.  While sales are brisk, many sellers are not getting the full listing price.
– The condominium market is rebounding in some areas, offering a good alternative for renters who are seeking good housing at affordable prices.
– Although the inventory is still below year-ago levels (down 4.8%), there is a good selection with great pricing options.
– Buyers can purchase with a down payment that is in line with landlord demands for upfront rent and large deposits, and have a more affordable monthly payment.
– Pending sales of condos area-wide rose about 6.3% during August.  Closed sales jumped more than 17.4%, with prices surging 26.7%.
-We are definitely working our way nicely through this housing recovery, with all of the latest data showing strong year-over-year gains in prices and sales of both pending and closed transactions.
– The National Association of REALTORS (NAR) reported the national median existing home price increased at an annual rate of 12.2% – the biggest yearly price increase since Q4 of 2005.

 

This entry was posted in Bellevue Washington Real Estate For Sale, Bellevue Waterfront Properties, General Real Estate Information, Home Buying, Home Selling, Homes for Sale, Hunt's Point, Washington real estate for sale, Issaquah Real Estate, Kirkland Washington Real Estate, Luxury homes, Medina, Newcastle, Puget Sound Homes, Seattle Homes for Sale, Seattle Waterfront Properties, WA, WA homes for sale, Washington Real Estate, Waterfront Properties For Sale, Yarrow Point, WA - Residential Properties and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *