Experts agree that 2018 will be another hot year for the Puget Sound housing market and Kirkland is only getting hotter as demand increases while inventory remains low.
Currently, the Eastside market has less than a month of inventory based on the monthly average sales, according to David Floan, executive vice president of loan production for Evergreen Home Loans.
“When you consider that the inventory that’s there could be gone in three-quarters of a month, that’s pretty hot,” Floan said.
He added that an average, balanced market has a three- to six-month inventory turnover, meaning houses that go onto the market are expected to sell within that time frame.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said this hot streak is in its sixth year for the Puget Sound region.
“The Puget Sound housing market is poised for another year of intense sales activity for new listings,” he wrote in his 2018 Puget Sound housing forecast.
Scott wrote that he expects early demand to be high, but new listings will remain low until March and then continue to grow through the summer and into fall. This will disperse the buyers across the new listings and flatten out the median home price appreciation for the last half of the year, he wrote.
“We anticipate these trends in all price ranges close to the job centers,” he wrote, “as well as surrounding counties in the more affordable and mid-price ranges where we are experiencing a shortage of unsold homes.”
Despite this trend for the region’s housing market, Floan expects the Kirkland market to only get hotter as inventory shrinks and demand grows.
“Depending on what statistics you look at,” he said, “the prices in Kirkland have risen in the last 12 months by between 15 and 20 percent and that’s just being driven completely by supply and demand.”
The Kirkland market won’t see a large increase in new listings, according to Floan, because homeowners who’ve bought in the last few years have historically low interest rates. The interest rate is predicted to slowly increase over time so the new homeowners would be buying a more expensive home at a higher interest rate.
“A lot of people will say, ‘I’m going to stay put, there’s no reason to put my house on the market,’ and that just exacerbates the whole inventory shortage,” Floan said.
The market remains hot, but home prices can only go so high before they outpacing buyers’ income. Kirkland already prices out many buyers and Floan predicts the price increase could cause the market’s eventual slowdown.
“You have to think that has to be coming with such a tremendous gain in value in 2017,” he said. “There just aren’t as many of those (less expensive options).”
Floan added that the good news is that the market likely won’t see that same growth and home prices will slow down.
Aside from the supply and demand, Scott wrote that job growth and historically low interest rates are also to thank for the hot sales activity on the market.
Kirkland’s market will remain competitive for buyers and Floan recommends they do everything they can to make their offers most attractive to sellers.
“You can’t come in saying, ‘I could go a little more on this house, but I don’t want to right now,’” he said. “You’re going to get one bite of the apple on these things, so that’s why we say make your best offer first.”