AP - A story from CNBC Realty Check discussing the drop in home sales for the month of July, 2013:
1) Pending Home Sales Dropped 1.3% in July
2) Home Sales West Coast down 4.9%
3) Mortgage Rates increased to highest level since 2011
4) Jumbo borrowers could be effected by new regulations (Loans over $625,000) See definition of Jumbo Loan here.
What does this all mean for Home prices in Seattle?
Admittedly, I have been quiet on the blog due to 1) a lack of free time at the office; and 2) the real estate market hasn't been that interesting as of late. All the news has been positive, and as I've told everyone who will listen...this positive news is simply not warranted.
We believe the increase in prices is primarily due to two factors that are likely unsustainable:
1) Inventory of homes was extremely low by historical standards down to 3265 in March of 2013 (currently at 4602 for King County SFH)...that is a nearly 50% increase in inventory in just 6 months;
2) Interest Rates rates were historically lows (3.4% in May, 2012) but have since rose to nearly 4.5% (see Bankrate.com). That is a HUGE drop in purchase power for the average consumer According to mortgagerate.com, that increase would increase the payment for $500,000 30 year fixed mortgage from $2738 to $3074/ mo.
Accordingly, we are looking to see a decrease in sales and an increase in inventory and another fall in prices for the intermediate future.
If you have questions for Seattle area Short Sale experts, please consider contacting a Seattle Short Sale Attorney.
Weitz Law Firm, PLLC
520 Kirkland Way, Ste 103
Kirkland, WA 98033