By Kathryn Kleber, Panelist for Real Estate – Real Stories at Wesley Homes, Managing Broker Keller Williams Realty, Market Research Analyst The 2013 real estate sales success within 21 western Washington counties provided a sigh of relief to sellers and buyers. The 2014 forecast offers hope to people who have been waiting for real estate recovery before making their move. While the long decline of real estate values that depressed the US economy and distressed individual households has not been forgotten, runaway pricing and loose lending practices are now history. The passage of time allows us to look back and identify August 2007 as the first month of home sales price decline and February 2011 as the first month of recovery. In the first quarter of 2013, low prices and low interest rates attracted a rush of buyers to a market with little to no saleable inventory; sellers received multiple offers that boosted prices on their properties and cautious appraisals kept values controlled. Interest rates were raised, the market stopped and interest rate rises were retracted. The economics of supply and demand were alive and well. Today, improving inventory, stabilizing prices, fewer short sales and a healthy local economy are credited with keeping the real estate market "chugging along nicely" around western Washington, according to real estate brokers with the Northwest Multiple Listing Service (NWMLS). In the December 2013 NWMLS news report, members shared their views: OB Jacobi, president of Windermere Real Estate, said that the slowing pace of home prices is "actually a good thing. As we saw in years past, continual double-digit price appreciation leads to boom and bust cycles that none of us want to relive." MLS director Frank Wilson believes it will be more expensive to buy a home during 2014. "Slow but steady price appreciation, upward pressure on interest rates and increased costs of getting a loan will all work to decrease the buyer's purchasing power," said Wilson, the branch managing broker and Kitsap District manager for John L. Scott in Poulsbo. For 2014, the big question is not if interest rates will rise but when. This concern appears to be encouraging buyers to continue their home search. Looking ahead, brokers tend to agree positive momentum will continue, but hurdles such as unrealistic sellers, new loan regulations and threats to purchasing power remain. Questions about this article can be directed to Kathryn Kleber: [email protected] or 206.650.6113.
