Happy Holidays!

Welcome to the last Umbrella of 2023 –

Its just a bit over a week away for the Jolly Old Guy to visit, along with all family & friends to share a feast, exchange a gift or two, clink glasses and laugh!  Lots of Laughter this season!

With the way things are going I want to give you a quick Real Estate Moment:

What I am hearing, feeling, and witnessing is – Spring is going to bring out more buyers – with interest rates continuing to dip (ever so slightly) – but non the less, going down.  Which will lend itself to more buyers looking to purchase.  BUT – Sellers are still on the scarcity side of this equation (looking into my crystal ball).
If you are thinking about buying this next year – be prepared to  negotiate and do the dance of “what is important to you”.  I am here to help, advise, and negotiate with you to get what You want.

I have inserted from Kyle Bergquist weekly newsletter some awesome tidbits from his 2024 Economic/Real Estate Forecast.

**Mark your calendar for Saturday January 13th I will be presenting Kyle and his lively, educational, easy to grasp & understand 2024 Seattle Area Real Estate/Economic Forecast at Greenlake Strength & Conditioning Gym.  This is a Free Event to all that want to attend.  I highly recommend joining – it will be a casual atmosphere with lots of great tidbits & take aways.

Keep a look out for more information after Christmas!

Puget Sound Real Estate:  The Inevitable Rise of the Cash Buyer    

Here are the highlights and some quick thoughts:

1)      Home prices will fall 1% – Maybe they will nationally, I’m not sure I’d bet on that locally…especially considering Redfin’s 4^th point (which I agree with).  As Danny Greco from Keller Williams puts it: “I don’t see [prices declining in Puget Sound] at all.  If rates fell to 6.5% tomorrow, we’d see a lot more buyers get off the fence than we would sellers.  And just about every seller is going to be a buyer so, while I agree that the lower rates go the more inventory will come of it, it’s going to disproportionately bring more buyers into the game than sellers.” – which, higher demand than supply = rising prices, not falling.

2)      New listings will tick higher – Agree.  There are a lot of would-be sellers that have held off on selling over the past few years.  Whether it was Covid related, or not wanting to trade in their super low Pandemic interest rate for one of today’s higher rates…at some point sellers are going to take the leap and finally sell.  Given the relatively low new-listing numbers over the past 18 months, I would suspect things aren’t going to get any slower, thus new listings will probably tick higher.

3)      Home sales will increase 5% – At least!  There have been 15,469 purchase transactions in King County so far this year (January through November 2023).  During that same time period in 2022 we saw 20,490 purchase transactions; 27,746 in 2021; and 23,838 at the height of Covid in 2020.  A 5% increase in purchase transactions would only equate to a total of 16,242 purchase transactions in King County in 2024, which is still FAR below the normal transaction count.  So do I think we’ll see a 5% jump in transactions?  Yeah, at least that amount.

4)      Mortgage rates will decline, but stay above 6% – For the first part of the year, sure!  Why not?  But there are too many variables that affect rates to go much further out than that.  What if we have massive problems figuring out our debt ceiling next year?  The increased risk to investors that the US could default on their debt could cause interest rates to skyrocket!  On the flipside, what if WW3 breaks out – The US/Europe/Israel/South Korea/Taiwan vs Russia/China/Iran/North Korea?  The increased geo-political risks could cause rates to crash.  If I’ve learned one thing over the past 18 months it’s that we can have a pretty good idea of where things will go based on the info we have now, but there’s always new info coming out that affects where things ACTUALLY go.  Case ‘n point, as Danny Varona from Sotheby’s highlights, in Redfin’s 2022 forecast they estimated rates peaking at 3.6%; and in Redfin’s 2023 forecast, they projected rates to end the year at 5.8%.  Spoiler alert:  Rates are over 7% right now.  Redfin’s rate forecast have been accurate both of the last two years…but only if that year ended on February 28^th.

5)      Homebuyers will start working directly with listing agents – I’m going to defer to the agents to answer this one, but if I had to guess, I would guess “No” on this one.  Listing agents inherently prioritize the seller’s interest.  After all, that’s who hired them!  So as a buyer, would I want to work with someone who consciously or sub-consciously doesn’t have MY best interests in mind?  No.  Not really.  Especially if I’m dropping a million dollars on something…

6)      Renting will be the norm – I think the end goal for most people will still be homeownership, but that today’s high rates are making it really really hard for people to realize that goal.  So I would say that for so long as rates are high, and the average cost of homeownership is  52% higher than renting, renting will be the norm.

7)      Housing unaffordability is Biden’s biggest problem – I’m not touching politics with a 10 foot pole.  Next!

8)      Boomerang migration will happen – Totally agree.  We’re already seeing it.  First of all, Boomerang migration is the idea that during the Pandemic people moved away from the city centers, but now that the Pandemic is over and people are being “encouraged” to show back up at the office, people are going to start moving back towards the city centers (or at least figuring out a way to spend more time closer to the city centers – Pied-a-terre anyone?  At any rate, Seattle had 16,700 new residents per the most recent data.  During Covid, Seattle lost 4,300 residents.  The Boomerang Effect is already happening here in Puget Sound, and will ultimately support the Puget Sound housing market. **Stats were taken from Redfin’s 2024 Market Forecast 

Have a Wonderful Holiday & I will see you in the New Year!

With Love & Gratitude
Theresa, Opie, Coco & Chanel