As 2019 begins, the bustling technology sector in the Seattle area is likely to continue fueling Seattle’s housing market, though there will be some changes. When looking back on December’s market in Kirkland, Jon Hunter, vice president of residential success at John L. Scott, said the median sales price in Kirkland grew from $695,000 in December 2017 to $823,500 in December 2018 — about an 18 percent increase.
Recently, J. Lennox Scott, John L. Scott’s chairman and CEO, released his forecast for the 2019 housing market in the Puget Sound area. Scott noted that despite some headwinds in the residential housing market, there are many positive signs, including job growth, millennials entering the market and interest rates that are still historically low.
“Heading into 2019, we anticipate the more affordable and mid-price ranges in all markets will go up one level of hotness after January 1 to a surge level of sales activity intensity, then transition back down to strong for the remainder of the year,” said Scott. “From January to April, we will see a mild increase in the median home price appreciation, which shows up in closings into June. Then, price appreciation tends to flatten out the remainder of the year due to the large number of new listings that come on the market over the summer, creating dispersed buyer energy.”
Hunter agrees with Scott’s predictions for the next year, saying he expects we will see more inventory come on the market in late spring. Hunter added that the economy is doing well, despite the fall on the stock market, and adding that Seattle’s consistent growth in the technology sector bodes well. When looking toward the spring, Hunter said he thinks it’ll be a different market from last year, but is still poised to have strong growth.
Recently, ATTOM Data Solutions released a home affordability report, which found the median home price in the United States reached the least affordable level since the third quarter of 2008. However, the report notes that the Seattle market saw annual wage growth outpace annual home appreciation, which is encouraging for those looking to own. Some of this wage growth can be attributed to the continued expansion and investment in the area’s technology sector from companies like Amazon, Microsoft, Expedia, T-Mobile, Facebook, Google, Apple and Indeed, which sets a strong base for the local economy.
“There has been a lot of news as of late about how the affordability factor in Seattle has skyrocketed,” said Hunter. “Real estate is an investment into your future, and the key to this investment is to purchase a house, condo or co-op as quickly as you can. Many times it can be cheaper than renting, and you’ll build equity with the market appreciation while you pay down your loan.”
Hunter added that he’s seen many clients then use this built-up equity to purchase a bigger home — or alternately rent out their old home with cash-flow positive income. While purchasing a home isn’t right for everyone, he recommends starting the conversation with a lender and real estate broker early to determine the best plan of action when it comes to home ownership.