Current increases in home prices were (and still are) the result of the well-known concept of supply & demand and should not lead to conversations of a new housing bubble. Below, look at home prices as compared to current incomes.
Here is a graph showing the monthly mortgage payment on a median priced home in the U.S. over the last 25 years:
Mortgage payments are currently well below the historic average over that time period. Purchasers are not overextending themselves to buy a home like they did on the run-up to the housing crash.
Lawrence Yun, the Chief Economist at the National Association of Realtors, recently explained in a Forbes article:
“Even though home prices are climbing far above people’s income, exceptionally low mortgage rates have permitted people to buy a home without overstretching their budget. For someone making a 20% down payment, the monthly mortgage payment at today’s mortgage rates would take up 15% of a person’s gross income. During the bubble years, it was reaching 25% of income. The long-term historical average is around 20%. Therefore, a middle-income household does not need to overstretch their budget much if at all to buy a typical home.”
Due to low interest rates, demand for housing has dramatically increased. This has caused a jump in home prices. However, low interest rates have also allowed the monthly cost of buying a home to remain well below historic norms. We are in a strong housing market, not a housing bubble.
What a time to call Seattle home. Our city continues to be named one of the most desirable cities in the United States. From the numerous cranes popping up in South Lake Union to being recognized as an affluent power player in the tech industry, it’s no doubt we find ourselves living in an important era in Seattle’s economic expansion. Queen Anne hill finds itself poised among the hustle and bustle of our city. If you live on Queen Anne you are already aware that its location, great schools, parks, and charming homes are among the many reasons it is one of the most popular neighborhood in this area.
One way this can be measured is to examine statistics. Here I have compiled statistics regarding for sale and sold listings on Queen Anne (area codes 98109 and 98119) from 2014 and 2015. I chose to break this information down by price point to examine the changes in demand by price. These statistics only include residential, single family homes that are resales.
The findings are pretty incredible. For example, the number of sold properties in the price range of $1 million to $1.25 million rose 118% in 2015. When looking at properties in the price point of $350,000 to $500,000, there was a 69% drop in the number of listings and a 61% drop in the number of sold properties.
If you have any questions about these statistics, real estate needs, or what this means for your home please don’t hesitate to contact me at firstname.lastname@example.org.
For a full pdf download of this information, click on the link below:
Queen Anne Housing Market Comparison