local real estate news, statistics, and commentary without the sales spin.
Now that the big GOP tax plan has passed, let’s have a look at how it may affect the Seattle-area real estate market next year when it goes into effect.
There are two major changes to the tax code that will matter to home buyers and home owners: the doubling of the standard deduction (from $12,700 for a married couple in 2017 to $24,000 in 2018) and the reduction of the mortgage interest deduction cap from $1 million to $750k.
First up let’s look at the doubling of the standard deduction…
October market stats have been published by the NWMLS. Here’s a quick excerpt from their press release:
Key indicators for Western Washington housing still rising, but brokers detect slowdown and uncertainty
Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.
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“The challenge for buyers actually isn’t lack of choice, it is the rapid pace of sales,” suggested Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty.
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J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted October was the “best ever for sales activity in the Puget Sound region.”
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Compared to spring months, Scott expects volumes in the next few months will be at 30-to-50 percent of spring totals. “The stage is set once again for a frenzy housing market after the first of the year in the price ranges where there is a shortage of active listings for sale.”
Lennox sure likes that word “frenzy.” He seems to think that it has positive connotations. Personally I think it’s exactly the opposite. People do irrational and stupid things in a frenzy that they usually regret later. Is he saying that’s true of the current housing market? Maybe we actually agree more than I thought…
Now let’s dive into the numbers for October.
The only tiny shred of kind-of good news for buyers is that closed sales and pending sales are down slightly from a year ago. Of course, listings are down considerably more than sales, so the market overall is still trending in sellers’ favor.
Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to August data that was released this morning, Seattle-area home prices were:
Up 0.2 percent July to August
Up 13.2 percent year-over-year.
Up 20.4 percent from the July 2007 peak
Over the same period last year prices were up 0.4 percent month-over-month and year-over-year prices were up 11.3 percent.
Here’s an update of the chart I posted last month showing the year-over-year home price changes in all twenty Case-Shiller cities over the past year and a half…
I’m still not really sure whether or not we’re in the midst of another housing bubble in the Seattle area, but here’s a strong sign that we might be: Local real estate cheerleader and permabull Matthew Gardner is loudly proclaiming that “No, it’s not a housing bubble.” No, we’re not in a housing bubble. Now…
September market stats have been published by the NWMLS. Still no good news for buyers. Listings are scarce, sales are strong, and prices dipped, but no more than they do every year in the second half of the year…