Berkshire Hathaway HomeServices Northwest Real Estate Federal Way & Puyallup

Good Morning! Data supports the known truth that the real estate market faces growing headwinds that are cooling down the nation’s decade-long housing market boom. The Federal Reserve has succeeded in its objective to slow down the housing market. The National Association of Realtors reported This Week in Real Estate that total existing-home sales contracted 1.5% in September from August, to an annual rate of 4.71 million sales. While sales have retracted due to economic uncertainty home prices continue to be resilient thanks largely to lack of inventory. For a record 127 th consecutive month, the median home price increased year-over-year with more than a quarter of homes on the market selling above list price. According to ATTOM’s Q3 2022 U.S. Home Sales Report, the typical investment return or profit margin on median-priced single-family home and condo sales across the U.S. was 54.6 percent, up from 48.8 percent in the third quarter of 2021 and near record levels for this centur...

Good Morning! The U.S. Labor Department released the September Consumer Price Index (CPI) report This Week in Real Estate with results exceeding expectations causing mortgage rates to surge to new 20-year highs. When it comes to the bond market, traders have long priced in everything that was already known and assumed about inflation, but this week’s CPI data came in higher than forecasted, garnering a significant response from the market. It is highly unlikely that rates would go substantially lower as long as inflation remains at current levels and conversely, if inflation continues surprising to the upside, rates are more likely to continue higher and volatility remains a risk. Below are a few newsworthy events from the second week of October that influence our business:    * Here’s Just How Difficult It’s Getting for Home Buyers. The next several months will be a critical test for the economy, experts say. Consumers are facing economic pressure from every angl...

Good Morning! Realtor.com reported This Week in Real Estate that home buyers have lost roughly $107,000 in buying power this year due to mortgage rates doubling what they were a year ago. That begs the question: will home prices soften to close the affordability gap should mortgage rates stay elevated? While the rate of home price growth is cooling, CoreLogic reported this week that home prices were 13.5% higher in August than the same month a year earlier. CoreLogic expects the annual increases we have experienced the past few years will continue to shrink but will still show a gain of 3.2% by August 2023. The supply demand imbalance that pushed home prices more than 40% higher in just two years is what many believe will continue to support current prices. Below are a few newsworthy events from the first week of October that influence our business:    * High Mortgage Rates, Tight Supply and Economic Uncertainty: Here’s What’s Happening with Home Prices. Home price...

Good Morning! The Conference Board reported This Week in Real Estate that consumer confidence increased for the second straight month in September to its highest level since April. NAR Chief Economist, Lawrence Yun, said this week that he foresees slower price appreciation and corresponding increases in sales in 2023 with sales picking up in the second half of the year. He noted that limited housing inventory and almost non-existent distressed property sales have supported home prices. Below are a few newsworthy events from the fourth week of September that influence our business:    * Pending Home Sales Dropped 2.0% in August. Pending home sales sagged for the third straight month in August, according to the National Association of Realtors. The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 2.0% to 88.4 in August. Year-over-year, pending transactions dwindled by 24.2%. "The direction of mortgage ra...

Good Morning! The Commerce Department reported This Week in Real Estate that single-family construction grew 3.4% in August, however home building permits fell in August to the slowest pace in more than two years. Some economists point to the stubborn housing shortage as a saving grace that could keep the real estate market from a deep downturn. By some estimates, the nation was short about 5 million homes before the onset of the pandemic. “The shortage is not going away soon,” says Lawrence Yun, chief economist for the National Association of Realtors. “The near-term single-family outlook is complicated due to high mortgage rates. But the long-term outlook for homebuilders is bright due to the need to build more to fully relieve the housing shortage.” Below are a few newsworthy events from the third week of September that influence our business:    * US Home Sales Slipped, Prices Grew More Slowly in August. The National Association of Realtors said Wednesday that ...

Experts are starting to make their 2023 home price forecasts. As they do, most agree homes will continue to gain value, just at a slower pace. Over the past couple of years,  home prices  have risen at an unsustainable rate, leaving many to wonder how long it would last. If you’re asking yourself:  what’s ahead for the price of my home,  know that experts are now answering this question, and its welcome news for homeowners who may have been led by the media to believe their home would lose value. Historically, home prices have appreciated at a rate near  4% . For 2023, the average of six major forecasters noted below is 2.5% .  While one,  Zelman & Associates , is calling for depreciation, the other five are calling for appreciation. The graph below outlines each expert forecast to show where they project home prices are going in the coming year. To understand why experts are calling for appreciation next year, look to the economics of supply and d...

While watching the stock market recently may have started to feel pretty challenging, checking the value of your home should come as welcome relief in this volatile time. If you’re a homeowner, your  net worth  got a big boost over the past few years thanks to rising home prices. And that increase in your wealth came in the form of home equity. Here’s how it works. Equity is the current value of your home minus what you owe on the loan.  Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially. And while  rising inventory  and  mortgage rates  have cooled the market some in recent months, home prices nationally remain strong. That’s why, according to the latest  Homeowner Equity Insights  from  CoreLogic ,  the average homeowner equity has grown by $60,000 over the last 12 months.  W...

Good Morning! Altos Research CEO Mike Simonsen said This Week in Real Estate that with demand falling but not cratering, and supply of homes available for sale remaining depressed, a US housing crash remains unlikely. “The supply of homes for sale is just too short for the market to tank hard,” concluded Simonsen. Total inventory is far from the peak levels we saw in 2007 of over 4 million listings. Currently we are at 1,310,000. Serving as an additional buffer is the $29 trillion in US homeowner equity, according to the Federal Reserve. Below are a few newsworthy events from the second week of September that influence our business:  * A Crash Of The US Housing Market Is ‘Very Unlikely’ Even As Mortgage Rates Surge To 14-Year Highs. The average 30-year mortgage hit a 14-year high Wednesday, but that surge won't spark a crash in the US housing market akin to anything seen in 2008, investment strategist Louis Navellier told Insider on Wednesday . "There are very real concer...

Good Morning! CoreLogic released its Q2 2022 Homeowner Equity Report This Week in Real Estate showing a collective gain of $3.6 trillion or 27.8% equity increase since the second quarter of 2021. As we transition to the fall selling season perspective is critical. Volume of sales are down, yes. Home price appreciation is decelerating, yes. Mortgage rates are higher, yes. However, each of those metrics are compared to historic levels, so declining percentage changes should be expected, not to mention a decade long market cycle that was on borrowed time for a reset. Home prices are 43% higher than they were in early 2020 according to the S&P Case-Shiller Home Price Index and active inventory is still 43% lower than it was in 2019. While current affordability is a barrier to some, for other potential buyers they have more options to choose from allowing them to be more methodical and are taking advantage of a more balanced negotiating environment. Below are a few newsworthy events...