By: Dan Colson
The housing market in 2017 is going to receive a large influx of first-time home buyers. Millennials are finally reaching the time of their life when they are ready to settle down, buy a home, and move to the suburbs. Data by Realtor.com shows a projected 58% increase next year in first time home buyers from 2016. This will make an already super competitive market in the Seattle area, even more so. Which will likely, also, drive prices. And this will not change anytime soon, we will continue to see millennials entering the market for the next 10 odd years to come.
You may be asking yourself “what does this mean to me?” Well, if you are in the market for a house, it’s going to mean more of the same trends we have seen over the last few years: homes going for well over ask, multiple offer situations, no contingencies, etc. Luckily, right now, the price increases over 2015 have not affected payments significantly due to record low interest rates. However, there is a high likelihood that interest rates will rise in 2017. So if you were planning on buying a home in the next year or two, it may be prudent to start exploring what your options may be right now.
On the contrary, if you are a seller, the current market conditions are fantastic to sell! The Fall and Winter are typically slower seasons in real estate, especially here in the Pacific Northwest. This year, extremely constrained inventory has kept the market sizzling into the final months of the year. The Eastside continues to see price increases and an inventory level that is 83% lower than a balanced market. While coordinating a move during winter is not always the most fun endeavor, it could be a lucrative move as there is simply just not as many homes for sale as in the Spring and Summer months, in addition to the large pool of buyers currently looking in an attempt to avoid the fierce competition we saw this last year.
While residential construction has been ongoing in an attempt to meet the demand, the continued hiring by our region’s tech giants is making it difficult to catch up. For reference, Amazon currently has 8,800 job openings in Seattle. In addition to that, by the end of the decade Amazon will have constructed enough office space in the region to accommodate another 30,000 employees. Many of these hires will undoubtedly be the very millennials that are just now foraying into the housing market.
The good news is we have a strong, youthful, vibrant economy that is on pace to see continued growth for years to come. It seems that people and companies alike just can’t get enough of the beautiful Northwest!