If you’re buying or selling a home in Redmond in 2017, prepare for a booming seller’s market with properties in high demand.
Real estate website Zillow estimates that the median-price of a home in Redmond has increased by 14.2 percent over the past 12 months and the median price is estimated to rise another 6.1 percent over the next 12 months. Current housing prices in Redmond are above the peak of the housing boom in 2007.
Though the national real estate market may slow due to a predicted rise in interest rates, the Redmond market will continue to be strong due to three main factors:
• A lack of housing inventory to purchase
• A strong labor market, especially in technology related fields, driving new residents to the area
• An increase in conforming loan limits allowing homebuyers to quality for more home with less of a down payment
The low housing inventory we’ve seen in Redmond, and across the Puget Sound region, over the past few years will continue into 2017. There is simply not enough housing coming online, either existing or new builds, to meet the demand of the region. Homebuyers are competing for a supply of housing that doesn’t match demand, meaning increasing prices or bidding wars that drives the price well above asking.
Another factor contributing to housing demand is the strength of the local labor market, especially in the technology sector. With Redmond continuing to be a hub for technology jobs, more talent is moving from across the region, country and the globe to the city. All that new talent needs a place to live, driving even more pressure on the small supply of available homes.
Finally, regulations on what are called conforming loan limits changed in 2016. Previously, homebuyers purchasing a property for more than $540,500 were required to obtain a jumbo mortgage loan. A jumbo loan generally requires a higher credit score and a larger down payment than traditional mortgage products. The conforming loan limit for one unit properties is now up to $592,250 in King County, Snohomish County and Pierce County, providing more opportunities for homebuyers to qualify for more home with less down payment.
If you’re planning to buy a home in 2017, now is the time to get the process started so you can be ready for a competitive housing market. Enlist the help of a trusted mortgage professional who will discuss your home ownership goals, examine your financial position and review possible home loan options that fit your goals and financial status. Once you’ve started the process, the mortgage professional can also get you pre-approved for a specific loan amount. A pre-approval shows sellers that your offer is backed up by a trusted mortgage professional and that you’re qualified for a loan at the offer level. This is key in multiple bid situations and gives you as the homebuyer an offer ceiling as prices go above asking during a bidding war.
Taking the steps to meet with a mortgage professional to get prequalified is something you should do before you even set foot in an open house. The worst thing for homebuyers to do is find their dream home and then quickly realize that it’s out of their price range, or worse, get caught in a bidding war for the dream home and be pushed beyond their financial comfort zone.
The lack of inventory in the Redmond housing market, continued growth in the labor market and new conforming loan limits will support a strong real estate market in 2017. To succeed in this busy market, homebuyers will need to do everything they can to be in the best position possible to land in their dream home in 2017.
Don Zender is the vice president and regional manager in Bellevue for Evergreen Home Loans.