Northwest Housing Prices Heading North

After a two month slow-down, it seems that Seattle area housing prices have once again begun to climb. The trend has its upsides and downsides, depending on who you ask, but the reason for the shift is undoubtedly clear.

For prospective buyers, the rise this month means an end to what many hoped was an opportune time to find a deal. The past few months saw a cooling process for infamously expensive neighborhoods in King and Snohomish counties - inviting many prospective buyers to shop the buyer-friendly market.

Apparently the cooling spell churn up some hot bidding action. The Northwest MLS release numbers today showing the median price for a home in King County rising 6% to nearly $445,000 and Snohomish homes rising 7.4% to $382,000.

For sellers, this bidding fury is a welcome sign. Many homeowners have reported bidding wars that ended up raising their selling prices far above the original list price. Many builders have been reaping similar benefits by flooding the market with new properties during this hot spell.

But can increased consumer interest fueled by cooling rates really be the catalyst for such a dramatic price increase? Not likely. Once again we have to point again to those three usual suspects: employment rate, population growth, and interest rates.

An announcement this week that Microsoft would be leasing over a million square feet of office space in Bellevue to house 4,000 employees lit a fire under the housing pot. This extra muscle to the job market - and the inevitible population growth that will come with it - have put a premium on already hot-selling properties in the area.

On top of this all, interest rates in Seattle have remained stagnant at the relatively low 6.22% for a 30-year mortgage, inducing prospective buyers to snatch up whatever finds they come across.

Condo sales are showing even greater increases - proving that the trend is not only limited to high end properties or suburban areas.

Despite the perception of the national housing market as the economic whipping boy du jour, the spicy trends in the Northwest continue to be hot, hot, hot.

As always, find the best real estate IDX solutions at XoomPad.com and stay up to date on the state of the Seattle real estate market at UrbanTango.com.

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The Fed and Interest Rates - Part 2

After a two day summit by the Federal Reserve's policy-making committee, a definitive answer to whether US interest rates will change was given:

No... at least, not yet.

The FMOC made the decision to let rates remain unchanged (at 5.25%) for the sixth session in a row. The disbursed fear from Wall Street that rates may increase led investors to buy heavily, raising the Dow Jones by nearly 160 points. However, the decision disheartened those in the real estate industry, who were hoping that a cut in rates would improve the current housing slump.

Although the Fed chose not to drop rates, the issue of the weak housing market was a top concern. Many see the lame real estate industry as a leading contributor to the current overall economic state. Fourth quarter numbers of 2006 show a 19.1% drop in home building and renovation. How much of an impact did this have on the quarter's mere 2.2% overall economic gain? No one can be sure, but it certainly did not help.

Obviously, the home market may be the leading culprit for Fed policy-makers, as they noted that a future rate "adjustment" may be in order. As for now, mortgage rates appear to be stagnant, although default rates are steadily rising.

As for home buyers, sellers, and real estate agents, the only thing to do is hope for next time.

As always, discover the latest in IDX tools from XoomPad.com and keep up with Seattle real estate news at UrbanTango.com.

VS

Federal Reserve Discusses Interest Rates, Mortgage Defaults

Policy-makers in the Federal Reserve sat down this afternoon to begin a two-day summit to discuss a possible change in US interest rates, among other financial trends.

One subject that looks to be high on the list is the radically rising rate of mortgage defaults among American homeowners. Rising mortgage rates coupled with falling homeprices have meant that many homeowners that otherwise could have avoided default by refinancing, could not. These disturbing trends will surely weigh heavy on the minds of members of the Federal Open Market Committee as the weigh the Fed's options.

Most leading economists predict that a shift in the interest rate is unlikely - which would make it the sixth session in a row that the rate remained at 5.25%. However, the rising default rate, on top of a slower economy, could raise discussion of cutting rates in the future.

The Fed will announce its decision mid-afternoon tomorrow.

As always, discover the latest in IDX tools from XoomPad.com and keep up with Seattle real estate news at UrbanTango.com.

VS