By: Tyler J. Echelbarger, Realtor w/Coldwell Banker Bain
At the stroke of midnight on December 31st, 2008, I raised my glass and toasted good riddance, once and for all, to 2008. Indeed, many want to forget 2008 and its troubled economy, plunging stock market, financial meltdown, and government bailouts, but the lessons learned must never be forgotten.
One day in August 2007 we saw signs that trouble may be lurking as open house traffic abruptly dwindled, home sales slowed considerably, and realtors were left asking each other, what in the world happened to the market?
Even with the struggling market in the last quarter of 2007, we had reason for optimism in 2008. Lawrence Yun, senior economist for the National Association of Realtors, spoke to Seattle area brokers and thought that we would be relatively secure from the decline that had already devastated markets in California, Arizona, and Florida. In fact he saw Seattle as a “superstar city” and thought it likely that 2008 would outperform 2007. In fact, Forbes magazine wrote similar articles praising the Puget Sound market and even deemed it “bubble proof”.
RESIDENTIAL: Median Sales Price of Closed Homes
CONDOMINIUM: Median Sales Price of Closed Condos.
Turns out, Yun and Forbes were partly right. Although we have seen an overall decline of median sales price in King and Snohomish counties between 6-8%, we are not even in the neighborhood of the devastating declines felt in other west coast markets such as in California where prices are down 25-30% in many areas.
Although a bumpy and uncomfortable ride, the Puget Sound market can absorb this type of decline in median sales price. Ours is a diverse job market where we are not relying solely on Boeing for job security, as was the case in the downturn of the early 80’s. Another difference to the early 80’s downturn is the fact that interest rates today are at historic lows of around 5%, compared to an astonishing 16.5% in the 80’s.
We are in the midst of a buyer’s market that we may never see again in our life time. With historic rates, a plethora of homes to choose from, motivated sellers, and economists and real estate experts continuing to forecast the Puget Sound market’s eventual turnaround, the question is not whether or not today is a buyer’s market, it is, where will you live when it isn’t?
206.799.3877 TylerEch@Cbbain.com
Coldwell Banker Bain
