It’s a seller’s market as Snohomish County home prices rebound

  • By Jim Davis The Herald Business Journal Editor
  • Wednesday, May 27, 2015 4:17pm
  • BusinessReal estate

Remember when the housing market collapsed?

Yeah, that’s so 2007.

The market has bounced back, homes are being sold quickly and sellers are often getting what they ask for properties, and sometimes a little more.

“Inventory is controlling the day,” said David Maider, owner-broker of Windermere Real Estate/M2 in Everett. “There are a low amount of homes on the market and a relatively high number of buyers who want to take advantage of the prices and low interest rates. All of those things point to a market that generally favors the seller.”

Consider this: In April 2011, the median price for a home in Snohomish County was $225,000. Just four years later, this past April, the median price for a home in the county was $335,000. That’s an increase of $110,000, a jump of 48 percent.

While home prices fluctuate month to month, the arrow has been pointing up, and it’s been pointing up for some time.

That’s not to say the market is back to pre-recession levels. Home prices haven’t reached the top of the market set in 2007, when the median price was better than $350,000 some months.

Still, it’s in the same ballpark.

On the frontlines of the housing market are Connie Mennie and her husband, Ralph.

They’ve owned their 100-year-old home for 17 years in a historic part of west Stanwood. It’s where they raised their three kids. They wanted to sell the house four years ago when their youngest, Jake, graduated from high school, but they didn’t because the market was down.

Connie Mennie spends four hours each day commuting to her job as a customer communications supervisor at Sound Transit in Seattle.

“I want half the house and half the commute,” Mennie said. “It’s a great place to raise a family, but I work in downtown and my husband works in Maltby.”

They put their house on the market last fall but only got a few nibbles. They took it off the market in December and put it back up more than a month ago. The number of people looking at the home has been night and day.

That’s led them to ask the obvious question: Where will they move when their home sells?

“Every house we see that we like sells within a week, and I don’t want to make an offer until we know our house is sold,” Mennie said. “I like to plan things and I’m living with a lot of ambiguity right now.”

Someone who can relate is David Floan.

He’s the executive vice president of production for Evergreen Home Loans, overseeing 35 offices in six states, including a Marysville office.

Like the Mennies, he, too, is looking to sell his home, but he doesn’t know where he’d move.

“I’m personally prepared and ready to go, but the problem is I can’t find anything I want to buy,” Floan said.

While more people are putting their homes on the market, those new listings haven’t kept pace with the homes actually being sold.

In April, the most recent month of available data, homeowners in Snohomish County put 1,702 properties on the market, up from 1,591 homes a year previous. But the total number of listed properties for the county dropped from 2,237 to 1,937, a decrease of nearly 17 percent.

It’s considered a healthy market when there are six months’ worth of homes in an area. The supply of homes is measured by the amount of time it would take for the current inventory of homes to be sold if no new homes were listed.

Some parts of the county, like the Mill Creek-Mukilteo-Everett area, have less than a month of supply.

One of the factors is the recession. While home prices have increased, many homeowners haven’t built enough equity to be willing to sell and look for a new one.

People build equity two ways: by paying down the principal and by watching the value of their home increase year after year. Historically, homes increase in value in the Puget Sound area 4 percent to 5 percent per year, Floan said. That just didn’t happen during the recession.

In the past four years, homes have seen a surge in sales prices month after month. Will it continue?

Floan thinks it will, but more slowly, “in a more modest, more historic pace.” One thing that will slow the increase in home prices is an increase in interest rates.

“If we see rates ratchet up, that’s going to slow things up because there will be fewer buyers who can qualify for a home,” Floan said.

Real estate observers have expected interest rates to climb eventually, although they’ve hovered at historic lows for many years. Even if they climb, they’ll probably only come up slowly, said Deidre Haines of Coldwell Banker Bain.

“I’m pretty sure we’re going to continue to see a pretty robust market,” Haines said. “I don’t anticipate any major declines anytime soon.”

One of the market naysayers is Tim Ellis, who writes the blog Seattlebubble.com. He started the blog before the recession out of frustration that homes didn’t seem affordable. Despite the name of the blog, he hasn’t always been down on the housing market in metro Puget Sound. He eventually did buy a home in Everett in 2011.

But he’s raising questions about the market again. In a blog post this spring, he questioned whether the increase in the market is “Seattle Bubble 2.0.”

He noted similarities between today and seven years ago: double-digit rate increase in sales prices, low inventory and homes selling for more than the asking prices.

He also noted some differences, chief of which is that the no-money-down loans of the past have been regulated away and buyers are more cautious.

It all adds up to a weird market, Ellis said. Many home buyers are putting a substantial amount of money down on new homes, he said. It’s possible that other things are at play. Maybe there’s a tech bubble that could burst and hurt the housing market in the Puget Sound region. Maybe foreign investors could dry up for reasons that have nothing to do with the region.

“If we are in another bubble, I feel like the outcome is going to be very different, but I don’t know what it will look like,” Ellis said. And it’s possible that Snohomish County and the Puget Sound region are experiencing a shift in which property values climb into the rare air of areas like New York and San Francisco.

And that would be disappointing in another way, Ellis said.

“I bought a house in 2011, but my perspective is still the buyer’s perspective,” Ellis said. “It seems like that opportunity has evaporated for the people who are out there trying to buy today.”

Real estate professionals say they don’t think there will be a collapse in home prices anytime soon.

“I don’t think we’re anywhere near in a position to worry about another bubble,” said Haines with Coldwell Banker Bain. “The increase in appreciation has been pretty steady. It hasn’t gone up overnight.”

There are a lot of positives to the market right now, said Maider, owner-broker of Windermere Real Estate/M2 in Everett. Interest rates are still historically low, employment is up and consumer confidence is high.

While King County is becoming less affordable, that makes Snohomish County more attractive, he said. As for supply, there are fewer distressed homes now than just four years ago. New construction still hasn’t geared up. Maider believes that all makes a healthier market than eight years ago.

“The demand feels real,” Maider said. “I think the market is behaving like the market does when there is a low supply of inventory and a lot of demand in the marketplace.”

As for people being priced out of the market, it’s a legitimate concern, Maider said, especially since wage levels haven’t kept up with price increases.

“I think my gut response is it is all supply and demand,” Maider said. “If housing gets too high then fewer people will buy and prices will come down to the point where people can start buying again.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.