What’s in store for the Seattle real estate market in 2020?
What real estate trends are developing now? What are we likely to see emerging over the next year? How does all of this compare to last year? What are the best moves you can make as a renter, home buyer, home owner or real estate investor this year?
1. Seattle Home Prices
One of the most pressing things everyone wants to know is where Seattle home prices are headed in 2020. While Realtors will tell you the market is still busy and the demand for property listings is high, the data suggests trends changed direction in 2019. Business Insider reports that the national median home price fell from $280,000 to $227,000 in mid-2019. New York City and San Francisco have been in the news for suffering even deeper cuts. Even though the Seattle real estate market isn’t known for being cheap, it may be more insulated from the steeper corrections facing the country’s most expensive property markets.
Those that appear to have hit a ceiling. The latest statistics from Zillow show the average home value in Seattle has fallen 3.5% in the last year, to $714,800. Zillow is forecasting another 2% decline in local home values through September 2020. The median price of homes listed as of November 2019 was just $687,500. In September 20.8% of home listings cut their asking prices. Some of the highest average prices can be found in East Queen Anne, with an average of $870,700. On the cheaper end are Uptown and First Hill, with average prices under $450,000. More home buyers may choose to move out to the suburbs in 2020. Many will find more home for the money, and with the rise of remote working most no longer need to worry about the length of the commute. Check out the blog for our latest list of the best Seattle Suburbs to Buy a Home in 2020 for more details on what the surrounding area has to offer.
2. Seattle Rents
It’s no secret that it isn’t cheap to rent in Seattle. As of September 2019, average rents were $2,717 per month. That’s almost $1,200 per month more than the national average. On average, residents can expect buying a home is still cheaper than renting if they live in the same place for at least two years. Looking out to the suburbs again, buyers may find that house prices are much cheaper, but rents aren’t much different. Those dynamics can be great for buying rental properties as investments.
3. Financing & Interest Rates
While expectations were that interest rates would keep rising, concerns over the national economy seem to have reversed that course. The Fed reduced interest rates in 2019. Globally other countries have been reducing rates, and even moving toward zero and negative interest rate territory. We’re unlikely to see these rates in the US mortgage market. If we do, it would be exciting for
mortgage lenders to begin paying borrowers to borrow money. Of course, that would make it very unattractive for banks to make mortgage loans. They would at least be far more cautious in who they loaned money to. With mortgage rates in the 3% to 5% range, global capital will keep flowing into US debt markets. Lenders will keep wanting to put that money to work. We’ll maintain a nice balance between low rates and cheap loans and loan availability and access to credit.
4. Investment Trends
Both the residential and commercial property market is expected to continue to draw significant investment in 2020. While both may have been going through a soft correction recently, real state still offers the tax benefits, yields, cash flow, and security investors need. Global funds are still prizing the US as a place to invest. Massive funds and life insurance companies are still very bullish on investing in the mortgage market. That means liquidity and ultimately more money for mortgage borrowers to use.
5. Recession Rumors
Analysts have been warning of a pending recession for years. Most people have become numb to it and have tuned out. That doesn’t mean it won’t happen. Many financial experts predict 2020 will be the year it shows up. Any major negative movements in the stock market could propel this. On the bright side, it should send more money fleeing into real estate. Seattle’s economy is also expected to remain among one of the strongest in the nation.
6. The 2020 Presidential Election
The most influential factor impacting the Seattle real estate market in 2020 is the presidential election. We likely haven’t even begun to see the mayhem and emotional roller coaster the media will whip up over the months ahead. At best, everyone will be so jaded by the fake news by the end of the first quarter that they will tune out. It’s more likely that the air of uncertainty will impact the stock market and housing market. Many may put off making moves as they wait to
see who wins the election and what they really begin tackling. Of course, that may be far too late for sellers and buyers to make their best financial moves. The Best Real Estate Moves To Make In 2020 Seattle home owners have already seen their property values peak for this market cycle.
However, for those who plan to stay in their homes long term, low rates make this the best opportunity to refinance, and perhaps recapture some of the equity they have gained. Home buyers are unlikely to find another moment like this in their lives when low rates and softer property prices are aligned and mortgage credit is so freely available. There may be a short window of opportunity when it perfectly lines up to sell a home and cash out, and find great prices and rates to buy new homes. Whatever you do, don’t just sit on the sidelines and miss your chance to make a great move.