Not in my opinion. While we may be seeing a much-welcomed boost to real estate inventory, we're still far from a balanced market.
A balanced, or "neutral" market has between 6-7 months of inventory. Snohomish County currently has 1.4 months of inventory. And the Everett/Mukilteo area has even less -- 1.2 months. When inventory is less than 6 months, we are in a "seller's market" and we can expect home prices to continue to appreciate, demand to stay strong, and buyers will likely need to compete for available inventory.
This fact is backed up by the relatively fast-paced environment we currently find. Average days on market in Everett/Mukilteo and Snohomish County was just 8 days, and the entire MLS (most of Washington State) was only slightly more at 11 days.
When there are more buyers than sellers and market times are near all-time lows, it would stand to reason that home prices will continue to rise. As the graph below shows, Everett/Mukilteo and Snohomish County have both been on a steady upward trajectory, with the median sales price in Everett/Mukilteo at $415,000 and Snohomish County at $429,950 -- both with 13+% gains year-over-year.
And while the seasonal "summer vacation slow down" has begun, I don't think we'll see a huge impact given the low amount of inventory still present.
So, what about interest rates? Won't they slow things down? In short, a little, but probably not. Here's why. In the not-so-distant past, most people had adjustable rate mortgages (ARMs). Then, rates fell of a cliff due to the recession. Now everyone has a 30-year fixed mortgage. But, as that product inches upward, ARMs will begin to make a resurgence, keeping payments affordable for buyers entering the market.
+ Inventory still remains near records lows, creating a great opportunity for sellers in the marketplace.
+ The seasonal beginning of summer break coupled with a small influx of inventory has also created some great opportunities for buyers.
+ While interest rates may have a dampening effect on buyer motivation, rates still remain historically low. Alternate mortgage products, like adjustable rate programs, may also make a comeback if the traditional 30-year fixed becomes too expensive for some borrowers.
+ Working with a knowledgeable broker is more important than ever –- as accurately pricing homes for the changing market conditions becomes more crucial than ever. On the buying side, savvy negotiations could create some uncommon opportunities for buyers.
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