Hello again and happy Monday!
This is CJ’s Market Update number two coming to you from me, CJ Stewart with the Key2see Team! My focus is on the ever-changing real estate market in Pierce County. You can rely on this blog to show you our market's statistics and developing economical and housing information as it pertains to buying or selling a home in our wonderful area.
- Average sales price takes a very minor dip likely due to the anomaly of a rare few very high priced homes selling last month in Pierce County including the huge 6.3 million dollar sale on the Key peninsula!
- The highest sales price of $2,300,000 came from my home town of Gig Harbor! A beautiful $3,600 sq foot PNW modern home built in 2017 looking over Commencement Bay, Point Defiance, and Mt Rainier.
- Average days on market continues to hover just over twenty days. When I adjust my data search criteria to exclude homes over $900,000, the Days on Market goes down to 14 days! This shows that homes in a more competitive price point are moving faster.
CJ’s FYI: - Interest Rates
Economists, Realtors, and mortgage brokers alike are anticipating these low interest rates to stay put, but not for a whole lot longer! We are hitting historic lows with Buyers locking in rates well below 3% on a regular basis. When we look back forty years at interest rates we have never seen them this low. It is likely that once these rates begin to rise again (which many experts believe to be within the next year or two), we will never see them come back down that low again for a very long time, if ever.
“The scarcity of Inventory is the leading factor in driving prices up and the historic low interest rates are driving buyers into that rising tide of prices,” said Frank Hawkins, President of Hawkins Poe Realtors, in Tacoma. “History tells us that here will be more of the same as we move into spring and summer. “If interest rates weren’t at historic lows, buyers would not be rushing into the market place to take advantage of what is most likely the opportunity of a lifetime,” encouraged Hawkins. “I would be more nervous about this situation where it not for the Federal Reserve’s commitment to these low rates and the Federal Government’s insistence on pumping liquidity into the economy,” he said, adding, “I don’t see it changing in the near term / future, I do see a problem at some time in the future when eventually, higher interest rates, will inevitably converge with these rising prices.
That convergence will happen according to the history books, in the meantime, even if the prices are a bit too high, these low interest rates, locked in for 30 years, will provide a fantastic investment for today’s buyers. The situation has buyers asking, “Am I paying too much?” and sellers asking, “Can I ask for more?” My answer to both is YES” emphatically announced Hawkins.
James Young, director of the Washington Center for Real Estate Research at the University of Washington, said the search for value in outer areas has continued unabated, despite further lockdowns in January. “It is difficult to think of the last time when nearly every Western Washington County with the exception of Clallam, King and Jefferson had double-digit percentage price growth,” he remarked.
“This year’s “extraordinarily low inventory” (down 43% overall) suggests continued price growth into the spring as demand remains high and interest rates remain low,” according to Young.
“Those who own but do not want to sell because there is little inventory to buy, will most likely stay put. Those who want to buy and get on or up the housing ladder, will reap the benefits of these historically low interest rates. I can see them, in the future, telling stories to their grandchildren about this amazing, once in a lifetime, opportunity,” mused Hawkins. “I believe we are headed into a very busy spring and summer,” concluded Hawkins, “especially with the increases in vaccines, the major Puget Sound Counties moving into Phase 2 and relaxing of showing and open house regulations amongst heightened health and safety protocols.”
If you are thinking about Buying don’t be a person who looks back 50 years from now and wonders what could have been. A 1% difference in interest rate is a huge amount of money over the course of a 30 year mortgage. Locking in now is securing a rate that will be talked about and envied forever. Never hesitate to reach out to us to connect you with a Lender that is the right fit for you!