Northwest Land Team Newsletter Q1 2022

Builder’s Confidence

National Home Builder Index – 77 (Apr. 2022)

*The NAHB/Wells Fargo Housing Market Index (HMI) (Scale 0-100)

Seattle’s Real Estate Market

A high of 71% of homes in Seattle sold over asking last month, with most of those on the market for an average of just 5 days. Let’s connect to see how you can buy or sell in this hot market.

The Gardner Report Q1 2022- Click here to view

Interested in selling your land? Contact the TEAM for insights regarding your property!
Team@nwlandteam.com
206.639.9283

Seattle’s Development Real Estate

Development news in Seattle

Over the last quarter, Seattle’s real estate market has accelerated in average home prices, interest rates rose to new highs, and we finally have concrete workers back to work.

Ending the 1st quarter of 2022, Seattle is still sitting at around less than 1 month of inventory with a year over year price increase of 14% to 18% depending on the metrics and sources you look at. This prolonged low inventory is pushing real estate prices higher than ever before! Currently we are in the season when prices typically rises the most starting January and February and fizzling out in the early part of the summer. In addition, homeowners still don’t want to sell because there is nothing for them to upgrade/downgrade into. It seems like only dramatic life changing events are causing people to sell in this market. Also, we are seeing the bidding wars not skipping a beat heading into the the spring 2022 market. Seattle’s seller’s market seems to be making new highs on the weekly and it will be interesting to see if prices will continue to rise throughout the 2nd quarter.

Now you may be hearing a lot about rates lately. The national average for a 30-year fix mortgage sits at 4.86% according to bankrate.com. This is around a 2% increase from the lows we had in early 2021. You may ponder to yourself that this should slow or even decrease real estate prices, however Seattle shows no signs of slowdown as of this time. To put this changing environment into a different prospective, if you take out a $1,000,000 30-year fixed mortgage at 3%, your payment on just the mortgage alone will sit at $4,216. Now if you plug in the current national average of 4.86%, your payment will sit at $5,283. This is a substantial increase and we didn’t even factor rising home prices, energy costs, property taxes, insurance, maintenance costs and several other expense involved in owning a home. Currently, The Federal Reserve plans to push their rates higher which eventually will have a upward pressure on current mortgage rates even though they are not directly correlated. When will current buyers reach the ceilings of what they can afford? Only time will tell.

In good news, the concrete strike in Seattle finally ended! As we mentioned in previous newsletters, concrete workers were put on hold as The Union negotiated for better pay and benefits. This had an impact on several development projects causing them to be delayed or to find private concrete companies to fill the place. Due to the small supply of private concrete companies and large demand for concrete, developers had to wait longer and pay more for their concrete needs. I predict it will take a while for supply chains to balance out, however I believe we will be heading in a good direction from here on out.

That’s the news for this quarter, and we will see you next time!