That seems to be the big question with another glowing set of real estate stats from the Northwest MLS.
According to the latest NWMLS news release…
Prices on October’s sales were up 10.4 percent compared to twelve months ago. The median price for last month’s closed sales of single family homes and condominiums (combined) was $251,625; a year ago the figure was $228,000. The last time the multiple listing service reported an area-wide double digit hike in prices was March 2007 (up 11.3 percent).Prices for single family homes, which accounted for more than 86 percent of October’s sales, rose more than 11 percent, while prices for condominiums jumped 16.6 percent.
But, if you saw my post from our updated Foreclosures 101 class a couple of weeks ago, you’ll remember that foreclosure filings are up around 70% over last quarter. Washington state is now #11 in the country for foreclosure filings. I have a feeling that is going to put a damper on the recover, at least in some price points… mostly the lower ones that attract all the interest.
Also, some other things that can affect future sales: rising interest rates (which are likely to stay level for the next year, but not much longer), deductibility of mortgage interest (see my view on that deduction), etc.
For investors, this does may buying more of a challenging. With prices headed up and low inventories you may not be able to low-ball offers as easily. Keep your eye on the cashflow and net income, so that you can more readily negotiate a price that makes sense from an investment viewpoint… even if its not as low as you hoped.
For home buyers, I remind you, your home is not a financial ‘investment’. Its an expense. It may be a necessary expense, and even a desirable expense, but its not an investment. So, except for comparing prices to each other, and comparing owning vs. renting, don’t treat it like an investment. If you avoid that mind set, then the drama of rising and falling values when you buy won’t affect you. I don’t care how much my home is worth… I can afford my payments and I like living there. I’m not selling any time soon.
Jason Hershey, Designated Broker
Tellus Real Estate Solutions, LLC
Commercial, Residential, and Investment Real Estate
PO Box 1113
Duvall, WA 98019
Cell: 425-417-5389
Fax: 425-223-3148
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