With the large growth in the Seattle real estate market last year, some have said that we are entering another bubble.
Most people have heard from friends and family looking to buy in the competitive areas of Seattle, seeing their bids beat-out by multiple parties putting offers above asking price.
Apart from the rumors of an inflated market, we are not seeing statistics that match those from the previous bubble. This year so far has actually shown decreases in the number of closed and pending sales. Prices have gone up, but it is starting to balance out as buyers are putting the brakes on how much they are willing to bid.
But all factors aside, most experts are still predicting a price growth this year of 6 to 7 percent.
There continues to be a lack of supply in key markets. Those that could put their properties up on the market have seen the price growth last year and are deciding to wait it out to see how much more value they can build in their home before selling. Owners deciding to sell also need to be able to make enough of a profit from their original purchase price to put a down payment towards their next home.
In addition, first time home buying is more difficult than back in the last bubble. New layers of underwriting guidelines have made financing tougher to get.
A balanced market requires a four to six month supply of homes, but King County and Seattle both fall well short of that balance. King has a 1.8 month supply, as does the Eastside, and in Seattle, its 1.3 months. With levels like that, prices wont start to balance out any time soon.