If You Were a Buyer Frustrated By the Lack of Houses To Pick From Be Prepared For More of the Same This Year In SW WA.
Posted January 27, 2020 in Real Estate Trends
2019 ended on a strong note for real estate Sellers given the lack of inventory. Closed home sales in December were up more than 32% over last year. Pending property sales were up over 10% compared to December last year as well. The strongest indicator for the direction of the market is our months in inventory. This shows how many months at the current sales rate it would take to sell all the properties on the market. For December there was 1.8 months in inventory over 1 month less than a year prior and the same as in 2017. With those statistics if we look at price increases that followed December of 2017 we would see property values increase by approximately 10%. With it being a Presidential election year I think those gains will be tempered, but it definitely sets up for another year of strong price appreciation to start the new decade.
Clark County new construction permits are down 20% year over year through the month of October with 1,148 permits total. Given the lack of finished lots coming to the market it does not appear those numbers will improve keeping inventory levels low in 2020. Approximately 25% of the current inventory being marketed to sell is made up of new construction.
Fannie Mae, Freddie Mac, VA, and FHA are increasing the loan amounts they will fund up to this year which should add a slight increase in sales activity over the traditional seasonal improvement we see.
Do not forget the Real Estate Excise Tax (REET) Decrease and Increase being applied to property closings this year. Great news for people selling property under $500,000, you will see a slight decrease in the tax percentage you are charged by. 18% for a total tax of 1.6% paid by the Seller at closing. For a $450,000 property sale as an example this is a savings of $810 to the Seller. REET stays the same fee as it was last year at 1.78% for properties selling between $500-$1.5 Million. For property sales above $1.5 Million and up to $3 Million there will be a 1.47% increase in REET to be paid at closing by the Seller for a total fee of 3.25%. For property sales above $3 Million there is a .25% increase up to 3.5% total paid in REET by the Seller at closing.
If you survived reading through all of that boring information, and you have questions or need help with buying or selling please give us a call at 360-609-0111 or email us at firstname.lastname@example.org.
Managing Broker | ReMax Equity Group
Wollam & Associates
Real Estate Expert