As 2017 is coming to a close, it is time to look towards 2018. I thought I would discuss what we can expect in 2018, whether it will be a buyer's or seller's market, inventory expectations, how buyer's can prepare, home prices, interest rates, and the Seattle job market. If you have not read Part 1, I encourage you to take a read through that as well. I discussed whether it is a buyer's or seller's market, inventory expectations, and how buyer's can prepare. In Part 2, I am discussing home prices, interest rates, and the Seattle job market.
We have yet to see a slowdown in the market. I anticipate that 2018 will be a very similar year to 2017 and 2016. A strong seller's market, low inventory, and more people moving into the city. When you take those 3 factors into account, with no indication of a slowdown, prices will continue to rise. We are currently in mid-November and even now my clients are experiencing multiple offer situations and homes listed with my office are experiencing extremely busy open house weekends with over 40+ groups! With that said, after Thanksgiving we always see a drop off of market activity. I expect prices to rise substantially in the Seattle-area, but in different locations when compared to this year and last year. In 2015, Belltown appreciated the most at 24.4%. In 2016, around the U District appreciated the most at 17.4%. In 2017, so far, Shoreline has appreciated the most at 22.5%. It is tough to know where will appreciate the most next year but one thing is for sure, prices have not shown any indications of slowing down. Buyers have two options, they will either ride the wave of a appreciation or standby as housing prices continue to rise.
Interest rates have been an interesting factor over the last few years. They have hit all time lows in the low 3% mark. Now most primary resident buyers see interest rates floating in the mid-4% range, which is historically very low. With that said, it is predicted that interest rates will slowly rise as we approach the 2018 with some more hikes expected in 2018. If interest rate is a big factor for you, the sooner you buy the better.
Seattle Job Market
The main driver for the Seattle-area's incredible growth has been the job market, specifically in technology. While Amazon is not the only driver for the Seattle job market it certainly is the most influential company. There are a lot of indicators of what the job market will look like in Seattle for the next year. If you glance at the Seattle skyline, you will see over 20+ building cranes. With the exception of two cranes, these cranes are building either a hotel, office space, or commercial space. Obviously, those new buildings will be creating new jobs, and companies will be leasing out space. Amazon has recently leased a new space on 5th Ave at Rainier Square. The new building will be the second tallest building in the city and all 722,000 square feet of office space will be completely leased out by Amazon. This is not even taking into consideration all the other Amazon buildings that will be expanded into next year. Google's new Seattle/Northwest HQ will be completed in 2019 located on Mercer Street and the Seattle Children's Hospital research center will be completed next year.
In any case, I could go on and on about all the companies expanding in Seattle. Long story short, STEM jobs are already here and will continue to grow at an amazing pace. I anticipate that this will slow down in 2020, but I will leave that for a future blog post.
In summation, 2018 will very likely be a complete reflection of the 2016 and 2017 housing market. The area has no indication of slowing down, jobs are still being created, people are still moving here, inventory is historically low, interest rates are historically low, and the city is as exciting as ever! With all that taken into account, it is certainly tough to see how the housing market will be any different next year.
Want to discuss more?! Let's get coffee. Just give me a call!