The real estate market for the past year 2000 has shown significant
changes from previous years when the regional and national economies
were expanding. Rising interest rates, increases in energy costs and
the correction of high-tech and dot-com stocks over the past three
quarters of 2000 has had an effect on the local housing market in
The real estate industry for 2000 shifted from its fast-paced
seller's market of the past 3 years to a stable trend. In some areas
further removed from the urban core or those that have strong
competition from new construction, a buyer's market prevailed during
the fourth quarter of the year.
Although the increase in interest rates typically affects moderately
priced housing, the price level under $300,000 was least affected by
the shift in economics. The mid-range at $500,000 to $1,500,000
(move-up buyers) moderately to heavily invested in the local stock
market and high-end housing catering to business executives with
large stock portfolios and stock options saw their economic wealth
decline with the stock market correction.
While the Northwest Multiple Listing Service continues to report
increases in the median price for housing in the Seattle
metropolitan area, $234,000 at years end, up 7% from a year ago
December 1999, the absorption of inventory is off by some 10% and
days on market is increasing up from 42 to 46 days for closed sales.
Today's sellers need to be cognizant of the current real estate
climate. The rapidly appreciating home values and multiple offers
the first day on market have cooled. Purchasers have more choices
and time to make the proper buying decision. They are not willing to
over-pay based on historic demand. Buyers prefer homes that are
staged for resale; those that offer neutral colors, and that are
competitively priced. When over-priced, a listing benefits the
competition in making their home look more affordable.
The real estate market for 2001 is anticipated to follow much the
same cycle as previous years. Interest rates have declined from
their high of 8.5% to the low 7% level. This will make housing more
affordable and promote sales activity at the lower end of the range
allowing the move-up buyers to make buying decisions on
Economists anticipate continued low unemployment and low inflation
predicting that recession can be avoided with lower interest rates.
They anticipate lower energy costs this summer and greater stability
in the stock market.