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 varying degrees. 

     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 higher-priced housing. 

     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.