King County home prices are up 20% year-over-year! The Seattle PI stated a couple different reasons as to why this could be. The first being that due to an incredibly low level of available housing, many first time home buyers are getting caught in bidding wars. The second being that as continued reports surface about a recovering economy, people become more confident in buying more expensive housing.
Are those the only reasons prices are up? Another reason prices are probably rebounding so quickly is because they fell so far. In mid-2011, many home prices we’re so low that you could buy a home with barely any down payment and still pay less per month to own than you would pay to rent the same place. Many renters/first time home buyers (and investors) saw this opportunity as a no brainer, causing a huge flood of new buyers into the market, leading to increasing prices.
Regardless of the reason, prices are still up drastically! You can debate the reasons behind these increases to no avail. But the reality is as prices rise, consumer confidence rises, causing more people to jump into the market, causing prices to rise. It will continue to build on itself, and hopefully this time around now that prices are a bit more realistic, the prices will rise at a more sustainable level (5-7%/yr) moving forward.
Did I miss the boat? If you’re a first time home buyer, it’s not too late to get a great deal. You just need to know what you’re up against so you can properly navigate the landscape with confidence. Staying informed will help you make the best decision for your specific situation.
Don’t make the biggest decision of your life without getting educated! If you’re a first time home buyer looking to get more information about down payment assistance or the home buying process in general, go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.