The Seattle real estate market in King County, Washington has been hot and that's not expected to change going forward – at least for a long time. Purchasing a home right now provides a wonderful financial opportunity for your clients and their families.
And thanks to MBS Highway's Real Estate Report Card, you can show your clients the opportunity they have and the strength of the market – right in their specific county or zip code. Let's break this powerful tool down, so you can see how you can use it to help your clients move forward with a home purchase and to gain valuable referral relationships.
Historical and Forecasted Appreciation Is Strong
Taking a deeper look in the area, we can see that homes are still affordable, job growth is strong, and both the historical and forecasted appreciation rates are on fire and will continue to remain stable moving forward.
Let's first talk about the opportunity in housing and affordability. The median home price in King County is $644,356. We have really strong appreciation with the 10-year historical appreciation rate at 5.63%, while the forecasted 1-year and 5-year cumulative appreciation rates are 8.86% and a whopping 31.88% respectively!
We know these rates of appreciation are strong, but to really drive this point home to your clients, it's important to explain what this means to them. Purchasing that $644,356 home today, given the forecasted appreciation rate of 31.88% over the next 5 years, means that buyer will gain $205,443 in appreciation alone! Being able to clearly and visually demonstrate this tangible gain for potential clients so they are spurred to act now can certainly help you increase your production and build valued referral relationships.
You may have customers that wonder if they can afford a home in this area. You can use the Real Estate Report Card to show them that affordability is very strong in this market, as evidenced by the Affordability Index of 92. This means that a family earning the median household income for King County of $98,666, which is well above the national average of $55,900, can afford 92% of the median home price when putting 20% down.
Of course, not everyone is putting 20% down, but you can see how this information gives homebuyers a good gauge of what they can afford, helping you build your pipeline and build relationships with both new and trusted referral sources.
Inventory Is Tight, But Will It Remain So?
We can see that there are just two homes available for every 1,000 people in King County. Inventory is down 36% year over year and nearly flat month over month.
Homes are definitely moving and it's crucial to communicate to hesitant clients that it's probably not going to get easier to purchase a home. Here's why…
Based on our demographics, there are currently nearly 385,000 people who are between 27-35 years old. This number is important because those in this age range are first-time homebuyers, and our goal is to see what kind of business we can gain from this demographic and how we can help them benefit through homeownership.
Out of these 385,000 people, almost 37,000 of them will either rent or purchase a home in the next year. And out of these 37,000 household formations, considering that King County has a healthy 58% homeownership rate, around 21,000 will purchase a home.
To meet this demand, builders would have to build 21,000 homes each year, or this amount of homes would have to become available for sale. Yet the actual number of homes being built is far below this, at just over 15,000.
This inventory and demographic data combined provides such an easy way to express to potential clients why they shouldn't delay their purchase, which again can help you increase production and gain the trust of key referral sources.
The bottom line is we have an inventory shortage, and this is a big reason as to why now is such a good time to purchase a home before it becomes even harder if inventory tightens even more or rates move higher due to rising inflation or other reasons. Plus, there's also the strong forecasted appreciation rates as discussed above and the fact that homes are selling fast.
In fact, a recent report from Redfin found that 79% of home offers in the Seattle area in April wound up in a bidding war, an increase of an already high 74.8% in March. This is even higher than the national average, where 72% of offers on homes faced bidding wars.
Job Market Strong Overall
We've seen steady job growth in King County over the past few years. Of course, last year with COVID-19 was a different story as it was across the rest of the country, but we already see job growth coming back strong and anticipate that strength to continue.
The current unemployment rate is at 5.65% in King County, which is pretty low compared to the national average of 6.1%. And we expect to see the unemployment rate decreasing further as the economy continues to reopen.
A strong job market is another reason the housing market is expected to remain strong in the Seattle area, as people are more inclined to purchase a home when they feel secure in their job. The opposite is also true.
MBS Highway’s Real Estate Report Card is just one of the many tools in MBS Highway that can be the crucial differentiator in turning prospects into buyers who have won their dream home – and turning originators into advisors their clients trust. With an MBS Highway membership, you'll have access to all of our tools, including Bid Over Asking Price, Buy vs. Rent Comparison, Loan Comparison tools, daily coaching videos, lock alerts and much more.
Do you want analysis like this on a daily basis? Try all of these tools for free with a 14-day trial and see for yourself the kind of difference they make in your business!