The once-red-hot housing market is ‘trending toward balance’

EVERETT — The housing market grew a little kinder to buyers in 2018.

That’s a shift from the frenzied scene of the past few years.

For the region’s real estate pros, it’s a sign of healthier times. Looking forward, they doubt home prices will go into free fall, like they did a decade ago. On the flip side, they aren’t betting on double-digit appreciation, either.

“Right now the market still favors home sellers, but it’s trending toward balance,” said Matthew Gardner, chief economist for Windermere Real Estate. He said “2019 is the year I believe we’ll get back to a balanced market.”

Recent figures from the Northwest Multiple Listing Service showed a trend toward improving supply and slower growth in prices.

Buyers should feel happy about that. They now have more houses and condos to choose from.

Snohomish County had about two months’ worth of listings in November. That’s far above the low point of 2018, when inventory dipped to about 20 days.

Current levels still fall well below the ideal four to six months that brokers like to see.

The improvement is statewide. For the 23 Washington counties that the listing service tracks, inventory rose to 15,830 in November, compared to 11,193 a year earlier.

If you’re looking to buy, that probably translates to less craziness — fending off competing offers or making major concessions to the seller.

“As an industry, we cringe when people have to waive their inspection or to make earnest money non-refundable,” said George Moorhead, designated broker and owner of Bentley Properties in Bothell.

Say the words “housing bubble” and Moorhead is likely to crack a smile.

“It’s funny because people are like, ‘Is there a bubble?’” he said. “We haven’t seen a healthy market in more than 15 years.”

Windermere’s Gardner and other industry experts have made the same observation.

The area’s home prices rose precipitously through the early and mid-2000s. Then came 2008, when prices fell just as quickly. By 2013, they had started shooting upward again.

More recently, they have begun to plateau.

“The long-term value for houses in the region will continue to appreciate,” Gardner said, “but it will be appreciation closer to the long-term average, which is around 5 percent.”

The median sales price of a single-family home rose 4.4 percent in Snohomish County from January to November, from $450,000 to $470,000. The November price was 5.6 percent higher than a year earlier.

During that span, the median sales price for the county hit a high of $511,000 in June.

Compare that to 2016 and 2017, when the median sales prices for houses and condos in the county jumped 13 percent.

The prices, mind you, don’t say what homes are worth — just what’s selling for in a given period.

King County, where the median house sold for $643,913 in November, saw a nearly 2.5 percent rise from January to November.

Looking ahead, rising mortgage rates could curtail some buying power.

Rates for a 30-year fixed mortgage hovered just above 4.5 percent in early December. Gardner predicted average rates of 5.5 to 5.7 percent by the end of 2019.

With Amazon, Microsoft and other tech giants still luring people to high-paying Seattle-area jobs, the economist sees plenty of future buyers in the region.

“I don’t see demand going away,” Gardner said. “Generally speaking, the market is still performing remarkably well — the fastest-growing on the West Coast, I would argue.”

Noah Haglund: 425-339-3465; nhaglund@heraldnet.com. Twitter: @NWhaglund.