Are King County home prices still on the rise? Yes, King County home prices are up 12.5% year over year. We posted a similar blog back in Jan of this year which reflected a 20% YOY increase. So these recent numbers are not quite as dramatic, but we’re still definitely in a quickly ascending housing market. Especially in the first time home buyer demographic.
Why are prices rising so quickly? The recent Seattle Times article stated several reasons including drastically low but rising interest rates, along with super low levels of inventory. Another reason cited was a moderate level of 5% unemployment due to large companies in the area hiring such as Google, Amazon and Microsoft.
Are prices going to keep rising at this pace? It’s hard to say for sure, but prices may start to taper off towards a more historical rate of around 5% per year. One of the other reasons not directly mentioned in the article is that affordability, especially as it relates to rent, is still very attractive. Once you take into consideration the tax benefits involved in owning it’s actually about the same monthly expense to own a home as it is to rent. As long as this equation holds true, prices and the housing market will stay strong.
Is it even still worth buying if you’re a first time home buyer? Because of the previously mentioned affordability factor, owning a home still makes a lot of sense for many first time homebuyers. Even as prices rise and interest rates rise and the affordability of homes moves away from rent, it will still make sense for many first time home buyers. Even if it costs a couple hundred dollars more a month to own than rent, the mortgage payment still stays fixed for 30 years until it goes away. Rent on the other hand will always be there, and will continue to increase in the long run.
Don’t make the biggest financial decision of your life without getting educated! Buying your first home may not be for everyone, it really just depends on your personal situation. If you’d like to get more information on the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops
