The 2016 housing market in our area is expected to be fast pacedÂ and of solid growth. Here are some market highlights in the Greater Puget Sound Region toÂ support this idea.
1. There have been 174,000 people that have exchanged their out of state driverâ€™s licenses for Washington state licenses in the last 12 months. Assuming there are two drivers per household, thatâ€™s 87,000 new households moving to Washington. Roughly 75% of those moved to the Greater Puget Sound region, more than 60,000 new households in Seattle-Everett-BellevueTacoma area.
2. In the last 12 months only 7,500 single-family building permits have been issued.
3. Unlike the last fast-paced market (2003-2007) there is not an overbuilt situation (see #2) allowing for speculative buying and flipping.
4. Unlike the last fast-paced market, buyers must be qualified to obtain a mortgage and second home mortgages are requiring more than 20% down.
5. There is more than 8,000,000 square feet of office space under construction in the Puget Sound Region. Of that, 70% is pre-leased. a. Assuming 110 square feet per employee that means employers are planning to hire more than 70,000 employees in the next 3 years. That is in addition to those who moved here in the last 12 months (see #1 above).
6. Delta Airlinesâ€™ location of an international hub at SeaTac will add $10 billion in construction work over the next 8-10 years as SeaTac adds 35 new gates for Deltaâ€™s hub. At completion and full utilization that can accommodate more than 840 incoming and outgoing flights per day and upwards of 10,000 new jobs for pilots, flight officers, flight engineers, airline mechanics, etc. All high-paying jobs.
7. While the Fed increased its internal interest rate from 0% to 0.25% a couple weeks ago, it has had almost no impact on home mortgages. That is because the increase was for banks borrowing money from the Federal Reserve and not home mortgages. Home mortgage rates will increase slightly throughout the next 2 years, mostly because demand for housing will be greater than supply.
So yes, we think the 2016 market will be at least as fast-paced as 2015, and the 2017 market will be slightly less fast-paced as more single-family and condominiums become available late 2016 and into the 2017-2018 periods.
(source Coldwell Banker Bain/Seal)
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