You can see how the market fluctuates over the years, but real estate in the long run will always be a good investment, especially around Seattle. Here is a part of a great article I read from Realtor.com last August, it explains why we aren’t seeing another housing bubble like we did in 2007/2008, even during a pandemic.
Why won’t we see another Great Recession-era housing bubble?
Published by Realtor.com – August 2020
The sky-high prices of 2020 are being driven by an influx of buyers bidding up prices on a historically low number of homes on the market. Until more properties come online, that dynamic is unlikely to change.
The Great Recession had the opposite problem: There were many more homes available than qualified buyers.
In the aftermath of the housing bust, it’s become harder for buyers without good jobs and strong credit to score mortgages. This weeds out riskier borrowers. And unlike the last go-around, when builders were erecting residences at what seemed like a break-neck pace, the under-building of the last few years has exacerbated the housing shortage.
Even if the economy doesn’t improve by next year and a vast swath of Americans remain unemployed, we are not likely to see the flood of foreclosures that characterized the housing crash, partly because government protections could be extended.
“It doesn’t feel at all like last time, when the market was getting all pumped up by easy mortgage credit,” says Mark Zandi, chief economist of Moody’s Analytics.
The housing bubble burst in 2007/2008 was driven by too much supply and not enough demand. We have the opposite problem right now. If you include low interest rates into the mix, it will continue to be a healthy market.
I also found this recent article that I thought was interesting especially in the post 2020 election era.
Is Seattle a good investment these days with all the turmoil?
Published by Norada Real Estate Investments – October 4th, 2020
Seattle has long been a second-tier technology hub, bolstered by companies like Boeing, Amazon, F5, and Real Networks. Seattle’s strong tech ecosystem has led to a number of startups choosing to start here, but more importantly, many tech giants are setting up “outposts” here. They’re moving jobs to Seattle so they can afford to expand or simply afford to remain in business. The influx of new high paying jobs plus relocating employees to Seattle is driving demand for homes in Seattle.
Over the past 10 years, Amazon has grown more than tenfold in the city of Seattle, from about 4,000 employees in its hometown to over 45,000. During the same time, the median home price in the city has shot up from $420,000 to $720,000 (according to the Northwest MLS) and home prices in the metro area as a whole have gone up 47 percent. Between 2008 and 2018, over 535,000 homes have sold in the entire Seattle metro area. For comparison, that’s 41 percent more than in the similarly-sized San Diego metro area.
Much of this growth in the local housing market can likely be attributed to growth at Amazon. The Seattle real estate market shares many of the constraints that drove up real estate prices in San Francisco. You can’t realistically build on water. It is hard to build in the mountains. You can build up, but that takes time and is expensive. And all the while, everyone wants to live close to the city center and jobs. This helps keep property values in the Seattle housing market high.
The areas around Seattle and the Eastside like Renton, Kent, Fairwood & Maple Valley in the south and Bothel, Kenmore, Woodenville & Lynwood in the north have seen an influx of new buyers. These suburbs are more affordable and when you can work remotely, you can live anywhere!
Ok, none of us have a crystal ball here, but I have firsthand experience of not only being in the real estate business for 25 years, but I am also a homeowner and investor who lived through the last recession and housing bubble. The prices will continue to rise in our area, most industry experts agree on this. Now is a great time to buy with low interest rates, in many cases you can own a home for what you are currently paying in rent! Contact our team and let’s talk numbers, we want to be your guide to homeownership in 2020 and beyond!