It’s HOT in the Puget Sound area this week. One of those weeks when most of us lament not having air conditioning at home because, honestly, we only need it for a week or two when temps crack 90 degrees. The rest of summer in Seattle fluctuates somewhere between “Geez, when is it going to warm up already?” to “Hey, 75 and sunny! Perfect!” Frankly, I don’t hear too many complaints about a rain-free month after this last extremely wet winter.
But alas, much like the temperature here in the Seattle area, so goes the real estate market. The window of a “normal/balanced” market tends to be short like a perfect Seattle summer. And we don’t necessarily know we’re in it, until we’re not anymore.
Remember back in 2010? The market had totally imploded. No one was buying. (But for those who did buy in ’10-12, congratulations on your excellent timing!) It was certainly a buyer’s market then.
Let’s Do the Time Warp Again
Now, let’s travel through time and recall as the market began to tick up again. For the next few years, the market was thawing. Buyers got over their fear (and so did lenders), and homes began to sell. Then….wait. What’s happening??
It seemed sudden, almost. Somewhere in that time between 2012 and 2014, the supply of homes for sale (aka inventory) fell dramatically. Almost in half. Then nature took its course and as inventory fell, price per square foot rose and here we are today:
Months’ Supply, King County 2012-2015
Median Price/Square Foot, King County 2012-2015
Where Will it End?
If I knew, I’d write a book about it and retire to a tropical place! But until Amazon, Google, Facebook, and all the other tech and biotech firms stop coming to the greater Seattle area, this is our new reality. Prospective home buyers, get used to it, and get ready: it ain’t easy and it won’t be again for a good long while. Real estate is always cyclical and it will be a buyer’s market once again someday. But don’t hold your breath waiting for those prices to go down, or for interest rates to stay as low as they are today.