It’s your mid-year real estate update.
Three things to think about if you’re gonna buy and sell real estate in Seattle, Washington, King County. Curious about the projections for the housing market for the rest of the year? Here are some things to consider in the upcoming months.
Home prices are appreciating at normal levels. For the past 10 years, home prices have just skyrocketed year over year. Experts at the Home Price Expectation Survey, which includes Fannie Mae, Freddie Mac and the Mortgage Bankers Association, they’re all expecting appreciation levels to go up but at a more normal level of 3.6% and second, interest rates are still very low. In the 1980’s, interest rates were up high as 18% and in the last 30 years, interest rates have averaged about 8.27%. Right now they’re hovering right around 4%. This is considerably lower than it’s ever been in the last several years. Lastly remember, an upcoming recession does not mean a housing crisis or crash.
I know everybody gets nervous about talk of a recession and research by Duke Survey of American CFO’s and the National Association of Business Economics, they’re all anticipating a recession in the next 18 months but again, a recession does not equal the same housing crisis that we had in 2008. Financial expert Morgan Housel recently tweeted, “An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way but statistically, highly unlikely. Could be over before you realized it began.” So oddly enough, three out of the last five recessions from 1980 to 2008, home prices actually went up.
Remember, 2008 was by far the worst recession we had ever experienced. Home prices went down considerably and you have to remember why did this happen? Notes were being sold a A paper that were really D paper. Loans were getting approved that has absolutely no business getting approved and people were getting mortgages on stated asset and stated income loans. Those types of things just aren’t happening anymore. Now in order to get a loan approved, they basically want your firstborn child.
So to recap, experts are expecting normal appreciation into 2020 and interest rates are expected to remain low and if there is a recession, it doesn’t mean a housing crisis, it just means we’re going to experience normal appreciation. So what does this mean for you? It means get off the fence and make a move. Take advantage of the great tax advantages of home ownership. Get your mind off your interest and potentially your property taxes. I hope you’ve enjoyed this mid-year market update.
If you have any questions about real estate, definitely give us a call, we are always here to help you and of course, always make it an awesome home buying and home selling day.