2019 Gig Harbor Housing Market Forecast, Part 1 of 2
PART 1 OF 2: Gig Harbor Annual Housing Update
Okay, guys, I want to pop in and give you the long awaited predictions for 2019! We saw an enormous gain in last year’s market throughout the whole year. We had an amazing summer in 2018 with incredibly low interest rates. Now, we’re starting to shift our focus and say, what’s going on in the marketplace for 2019? As buyers and sellers start contemplating a move, What can we expect?
I’m here to introduce the market analysis. I’m going to encourage you to talk to agents that lead with facts and not feelings. Because I might feel a certain way but what are the facts actually saying? As a neighborhood expert, it’s my job to focus on Gig Harbor numbers, West Coast numbers, and then have good knowledge and insight to know what the national experts are saying about the total economy and housing market.
I’m going to educate you with actual data throughout this series, the truth about what’s going on in the market, and what numbers give us that information. My goal is always for you guys to be as informed as possible. That way when you are looking at buying or selling in 2019, you’re armed with the facts and can make educated decisions on pricing, timing and preparation of your home.
This is a little bit longer than my usual videos. I’m going to try to break it up into a couple segments for you. So, I’ll be dropping the second video tomorrow. But number one question, we’ll just address it right now. The elephant in the room is, are we in a bubble? Are we headed for another 2008 housing recession? 2006, ’07, ’08? I’m going to say no. We are going to see a market shift. We’ll talk about what that is. Buyers, if you were in the market in 2018, you were like, Oh my gosh, how many offers do I need to write to be able to get a house? Sellers who wanted to sell their house but can’t because they have nowhere to go. We all did that rain dance for more inventory. Now, what we’re going to see is an increase in inventory, a little bit longer days on market.
We’ve been seeing 10%, 12%, 13% appreciation over the last few years consecutively. Now we’re going to start seeing a leveling off that appreciation to more normal standards.
We’re still going to see housing values increase. We’re just not going to see them increase as dramatically, which will take some pressure off of the market. Part of that is because more inventory will come on. I still don’t think that Gig Harbor and Bremerton are going to experience that same uptick of inventory at all price points. But certainly, we’re already seeing the luxury market a little bit more saturated with more inventory, choices and longer days on market. We started to see that in the middle of 2018.
As agents, we begged for more listings and a leveling off of pricing. We’re adjusting our mindset to a leveling of appreciation to more normal rates, which is what needs to happen in the marketplace. At some point buyers are tapping out and saying, “No, thank you. I’ll stay right where I am, its just too expensive.” Seattle knows what I am talking about.
What can you expect here? 3% to 5% in appreciation nationally. I would say there’s some exemptions here in the Gig Harbor market. Your move up buyer range, that $350K to 500,000K is going to continue to be that entry level home value in Gig Harbor where we just don’t have that much inventory. They’re not building homes at that price point. So, that is going to continue to be one of those low inventory points where you’re still going to see a lot of competition.
Then Bremerton, where I do a lot of business as well. The first time home buyer market there is out in full force.
For higher price points, we will see more inventory. The conversation that you need to be having with your agent is making sure that they are educated on pricing your house properly, knowing the competition, and making sure that they prepare and market your home in the best possible way so that you can meet your expectation of price for your house and timing for when you want to move.
If you overprice your house, you’re going to sit in that house longer. If you want to move your house quickly, your agent has got to know their numbers because now, more than ever, with more inventory coming on there will be more competition. Interest rates are expected to rise during 2019, expected to end 2019 at about 6%. We were at 3.25% at one point- which is phenomenal and amazing, but not sustainable. Now we’re headed into interest rates right around 5% with the expectation that they’ll probably go up a little bit more throughout 2019. Buying power reduces a little bit, and you need to make sure that you’re educated on the best price available in your market and in your price range.
When luxury buyers hear, oh my gosh, it’s a seller’s market, I’ll be listing my house- and not do much to prepare it, there is a very good chance if not priced properly it will sit and languish. Just because it’s a seller’s market at the entry level price point in Gig Harbor does not mean that you’re at a seller’s market in the luxury price range.
Get a local market expert that can educate you on your home’s value, price range, comps in the market and make sure that the new value of your house is adjusted based on current market standards- So you don’t leave money on the table and you don’t waste your time.
Where’s this information coming from? Tom Ferry is an amazing business coach and he recently had the owner of Keeping Current Matters on his podcast. Steve Harney, specializes in market trends and gathered the opinions of the 100 most educated real estate industry leaders. All of the top 100 economists in the real estate industry got together in a think tank and said, “Okay, where are we expected to go nationally?” On a national level those 92% of economists in the real estate industry are saying we will see market increase of 3% to 5%. 2% say that we will have some depreciation- I think that really depends on the market. Perhaps Seattle might see that at some point, just because they went so crazy the last few years. The last 4% of experts say that we’re just going to stay where we’re at in 2019.
The 92% that say that we are going to continue to see housing values increase, but just at a slower rate, that’s something that we can sustain. On the West Coast, our coastal cities, we’re still adding thousands of jobs. We’ll get into that in tomorrow’s video. But that is the beginning introduction to say, hold the phone, let’s address the elephant in the room. We’re talking about shift in the amount of appreciation for your house, slightly higher inventory levels. You need to prepare your house for market and know your numbers and rest easy knowing that according to the experts there’s no housing recession coming.
The last four out of six recessions actually saw an increase in housing prices. We’re coming off of the great recession back in 2006 to 2008, and we can all remember how terrible it was for the housing market. That is not where we’re going. The market conditions aren’t even close to what they were back then. So, stay tuned, I’ll have another video for you January 4th, and we can get into what some of the conditions are going into 2019 to back up the fact that we’re seeing just a slower appreciation of values. which is more sustainable.
So, sellers if you’re considering selling, get excited, there’s probably going to be a house for you to move into.
The increase in inventory is going to give new life to a number of transactions that we’ll see in 2019. If you have questions, hit me up and if you want to know the value of your house, I’m your girl. Gig Harbor, Port Orchard and Bremerton are my jam. I’ll talk to you soon and Happy New Year.
Hugs and Happy Homes!