All Forum Posts by: Aaron Morrow

The recent Federal Reserve meeting has sparked much discussion, particularly around the rate changes. It's essential to understand the broader context of these adjustments and their implications. Here’s an analysis of the key takeaways:

Economic Growth and GDP Forecasts: A slowdown in the economy from its previous quarter's robust performance is noticeable. However, GDP growth is still expected to be strong at around 2.5% for the year. Looking forward, the Fed has updated its 2023 GDP growth forecast to 2.6%, a notable increase from earlier predictions.

Inflation and Monetary Policy: Inflation is showing signs of cooling, with a gradual decrease projected by the Fed to reach 2% by 2026. Concurrently, the Federal Reserve continues to allow up to $95 billion monthly to roll off its balance sheet from maturing bonds, maintaining its current approach to policy tightening.

Federal Reserve's Interest Rate Decision: The key interest rate remains steady, with the Federal Reserve maintaining it at 5.25%-5.5% for the third time in a row. This stability is a significant factor in the current economic setting.

Predictions for Upcoming Rate Cuts: The Federal Open Market Committee (FOMC) has indicated the possibility of three rate cuts in 2024, each by a quarter-point. This development is less aggressive than market expectations but still marks a change in direction from prior Fed communications.

Market Reactions and Wall Street's Expectations: Following the Fed's announcement, the Dow Jones surged past the 37,000 mark, reflecting the market's response to the rate decision. However, Wall Street anticipates more aggressive rate cuts than what the FOMC suggests, expecting a total reduction of 1.5 percentage points next year.

The U.S. Job Market Outlook: The unemployment rate is forecasted to stay relatively steady, with projections at 3.8% for 2023 and a slight uptick in subsequent years.

Federal Reserve's Strategic Approach: The Fed is carefully balancing its response to inflation risks and economic indicators. They are ready to adjust rates if needed, but also showing patience in evaluating the effects of their prior policy decisions.

Impact on Local Mortgage Rates: In light of these economic shifts, some mortgage rates in the local market have seen a decrease, potentially making home buying more affordable. It’s a timely opportunity for market participants to reassess their options in light of these new rates.

This comprehensive understanding is vital for anyone interested in the real estate market and the broader economic trends.

With all that being said, what are you all seeing out there if you are actively buying in this Greater Seattle market? :) 

 Of course! 

🌟 Market Update - December 2023 🌟

Welcome to your December Market Update! Let's dive into the latest real estate trends:

Interest Rate Overview:

Current Rate: 7.2% - a slight dip from October's 7.8%.

Impact: Encouraging for potential buyers who were hesitant.

Home Prices on the Rise:

November 2023: Saw a 4.6% increase from last year.

Driving Factors: Lower inventory levels.

Sales Activity:

Closed Sales: Dipped by 16% from 2022 but saw improvement since October.

Inventory Challenges:

Active Listings: Dropped by 17% compared to November 2022.

Cause and Effect: High interest rates mean fewer transactions and shrinking inventory.

📊 Snapshot Summary:

Interest Rates: Down to 7.2% from 7.8%.

Home Prices: Up by 4.6% year-over-year.

Sales: Decreased by 16% from last year.

Inventory: 17% less than November 2022.

What This Means for You:

Whether you're buying, selling, or just watching the market, these trends indicate a competitive landscape with pricing pressures. It's a good time for buyers with the dip in interest rates, but the low inventory could pose challenges.

Take a look at the Data below for King, Pierce, and Snohomish counties! 

MARKET UPDATE - SEPTEMBER 2023

As we navigate the ever-evolving landscape of the Puget Sound real estate market, all have felt an air of change. The recent upturn in mortgage rates has caused the market to slow, with many buyers and sellers taking a step back. There has been a decline in the number of existing homes available for sale in Western Washington when compared year-over-year. This scarcity has ushered in a surge of interest in new construction, but it is clear that supply can't keep up with demand.

Looking at home prices, recent data indicates that sellers may have encountered a price ceiling. In King County, the median list price experienced a 2.7% decline compared to June. On the other hand, Snohomish County's asking price remained stable, and Pierce County saw a slight increase of 0.3%.

Looking ahead, Lawrence Yun, the chief economist at the National Association of Realtors, predicts a more favorable market on the horizon. Yun anticipates a loosening of inventory, with more resale and new construction homes entering the market. While he predicts lower interest rates, he does not believe there will be a decrease in prices. The Federal Reserve has predicted that the economy is expected to largely avoid a recession in 2024. This promising sentiment has ignited a flicker of hope and anticipation for a potential housing market rebound.

Here is a look at the data!

Let us know what you think! What have you been seeing out there!? 🤔

MARKET UPDATE - MARCH 2023

The Puget Sound real estate market saw a surge in pending sales last month, according to the latest report from the Northwest Multiple Listing Service. The report revealed that there was an encouraging 44% increase in mutually accepted offers from December and the median price for closed sales increased slightly by 0.41% compared with the previous year.

There has been a noticeable increase in open house traffic, showings, and multiple offers for homes in the mid-price ranges. While the level of competition seen is not as intense as it was at the peak of the market, it suggests we are moving to a more healthy and balanced market after the slow winter season.

As we enter the Spring market, more buyers are expected to ease their way back into the market. The mortgage rates that have ticked upward slightly are expected to resume their slight downward trend over the next few weeks as inflation eases. According to the Chief Economist of the National Association of Realtors, Lawrence Yun, mortgage rates may remain around 6.5% for a few more months before declining to below 6% in the summer, and possibly even as low as 5.5% by the end of the year.

 Hey what areas are you seeing this in? I have found at least in Peirce county most single family that is priced below 500k is going rather quickly. I just ran into a 10 buyer bidding war. Again it has been harder to pin down the exact price point and area where things land either as more seller, buyer, or balanced focused. Thanks for the info!  

Yup! I have seen this in certain cities and price points!  

The Puget Sound area is seeing more buyers and sellers enter the market as we gear up for Spring. A dip in interest rates has caused mortgage demand to jump 28% and the most recent NWMLS report shows that the number of active listings has continued its growth. By the end of December there were over 9,000 active listings for buyers to choose from, compared to just over 3,000 at the end of 2021.

The growing inventory and the current downward trend of mortgage rates is giving home buyers some much-needed hope. According to Nadia Evangelou, NAR's senior economist and director of forecasting, a decrease in rates could mean a significant drop in the cost of mortgage payments for potential buyers. With mortgage rates dropping to 6% instead of 7%, buyers could save around $2,700 each year.

With home prices hitting their apex in 2022, it is likely that most areas will see a slight decline as we make our way back to a more normal and balanced market. For sellers, proper pricing will be key as more homes on the market will bring increased competition.

Take a look at the Chart Below for Reference:

 I completely agree, Eric! What have you been seeing with your personal transactions with your clients? I know there are still some single family homes and condos that if they are priced well are still having multiple offers with review dates. I saw one in King County the other day. 

The end of 2022 brought a traditional seasonal slowdown in the market with the volume of closed sales falling 42% from a year ago. The combination of the holidays, local weather, and economic news caused some potential buyers and sellers to sit on the sidelines.

The number of total active single family and condo listings grew to 12,500 by the end of December, about a 165% increase from the 4,621 active listings from this time last year. With rates decreasing over the past month - averaging around 6.48% - and increasing inventory, motivated buyers have a great opportunity to secure a home with little competition.

As we look forward to this new year, rates are expected to dial back further as inflation cools off. The National Association of REALTORS® Chief Economist Lawrence Yun predicts rates will settle around 5.7% by the end of 2023. Looking at home prices Yun expects there to be no noticeable change, with some slight decreases or increases depending on the area. CoreLogic, on the other hand, expects there to be sizable price declines of up to 12% in markets like Seattle that saw surging homes during the pandemic. As the market normalizes, it is hard to predict exactly what will happen.

What we do know is that there is never a "bad" time to buy or sell real estate. It all depends your needs!