Three factors aligning for a great market opportunity!
The Pierce County Housing Market is continuing the "normalization" process (yawn) but as usual there's a few interesting stories within the numbers that are worth paying attention to. First, here are the basic numbers I like to follow:
1. Inventory – UP 3%
2. Closings – UP 23%
3. Months of Inventory – DOWN at 4.2 – Was at 4.9 one year ago.
4. Median Price – UP 8.3%
5. New Pending Contracts – UP 8%
Here's what I find INTERESTING….Inventory is the highest it has been since Springtime 2012. We actually had about the same number of closings last month as we did in February of this year, but at that time we had 33% LESS inventory! This shows the calming of the market I've been talking about in last few reports.
ONE MORE PERSPECTIVE to consider about the Pierce County inventory. Fully 23% of homes for sale are DISTRESSED, meaning they are either BANK OWNED or SHORT SALES. With nearly a 1/4 of our inventory distressed we are significantly above the National Average of 12%. Pierce County real estate is still working through some painful remnants of the big recession. By the way, King County is about the same as the National Average at 12.7%, so we can keep that in mind when listening to local media.
As you can see above, the BIG STORY is the leveling of price increases, we are pretty much in line with National Averages. With the increased level of inventory and stable demand for housing it is creating a moderation in the pace of home appreciation. This will be good for the health of the market overall and in the long term. This graph of year over year prices both Nationally and here in Pierce County shows the market finding equilibrium.
The WINDOW OF OPPORTUNITY. Recently, when the Fed Chairman somewhat unexpectedly announced there was no immediate plans to stop the purchasing of treasury bonds and mortgage backed securities, interest rates moved down. This reversal of the rising rates we have seen most of this year is not expected to last. As the economy finds it's foundation and eventually the Fed does start its tapering we will certainly see higher rates and look back at this moment as a golden opportunity. This chart shows where 4 expert organizations forecast interest rates to be in one year from now.
Add it up
1.) Calming Market
2.) Distressed Inventory is 23% of the Pool and
3.) An unexpected dip in rates!
We live in a great area with a great future, and Pierce County Real Estate will be a rewarding place to be in the coming years. It's not as easy as it was 6 or 8 months ago but there's still some great bargains out there and with a second look at some of the lowest interest rates in decades the window is open to secure that move up home, first home or investment property.