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By Virginia

Does this look like you?

Trulia chief economist Jed Kolko has got an interesting take on what will happen to the housing market this year – he says, first, that the price increases will slow down a little bit (nationally) but that there will still be lots of buyers. Interest rates will go up a little – the photo below shows what 2 national organizations speculate – but there will be more inventory, more to choose from.

Investors will back off, because prices have gone up too much to be a big bargain right now. First time buyers may have more trouble buying (saving for a down payment and having a stable job remain significant burdens) so who will be buying the houses?

Repeat buyers! They’ve got cash – equity in their current homes, built up over time and increasing more since prices have gone up again – and they’re ready for a change. Smaller, larger, over there, or even a second home.

Click here to read Mr. Kolko’s complete article.

Love the takeaway:

“If prices are slowing for the right reasons, great: growing inventory, fading investor activity, and rising mortgage rates are all natural price-slowing changes to expect at this stage of the recovery. But prices could slow for unhealthy reasons, too: if we have another government shutdown or more debt-ceiling brinksmanship, a drop in consumer confidence could hurt housing demand and home prices.”

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By Virginia

Local home prices spiked sharply last year in some neighborhoods

The Seattle Times writer Sanjay Bhatt shared some useful information last Sunday regarding home sales in King County; and I wanted to pass along some of the details about Seattle. As always real estate is totally “location specific”, so just knowing the changes in median price doesn’t inform you very well about what’s going on. Read the full article here.

Overall, we’re still about 9% below our county-wide 2007 peak in prices. But Ballard/Green Lake, for example, is only 3% below its peak (crazy popular neighborhood!) and the Queen Anne/Magnolia area was only 4% below its 2007 peak. Just about every house I’ve seen come on the market in recent weeks here has received multiple offers. And Central Seattle, which includes Capitol Hill, Madrona, Madison Park, Washington Park, etc., has actually surpassed the 2007 peak (think: lots of new construction…)

One surprise – at first glance – was that Beacon Hill, which had a below-average median price of $320,000 in 2013, actually saw a 24% increase in prices during the year! It helps to remember that these are median prices: half of the homes sold for more than that price, and half sold for less. Where the housing stock itself changes, the median price will move even though the average house might not be worth a lot more. Beacon Hill has seen lots of new construction, which sells for more, and has finally seen a big drop-off in the number of short sales and foreclosures that were plaguing it for several years, dragging the median price down. In Beacon Hill alone, distressed property sales went from 34% of the total sales in 2011 to just 15% in 2013.

The King County condo market is still way down from its 2007 peak, though it’s improving.

For the record: I don’t want to see prices spike, but I do share my clients’ pleasure at not being underwater anymore!

Does this look like you?
Local home prices spiked sharply last year in some neighborhoods