Are We in a Bubble? + Seattle Area Real Estate Report

Windermere Mercer Island

ARE WE IN A BUBBLE?

The short answer is no, or at least not yet. While Seattle prices have been escalating at breathtaking rates, demand remains strong, employment growth stable and climbing, and mortgage credit is still very strict.

The average FICO score required to obtain the best conventional financing is 750, while the lowest scores qualifying for standard conventional financing are around 701 and require substantially more down.

Today’s purchasers are very well-qualified and typically put 10-20% down on a home purchase. This is vastly different from the years before the loan crisis when nearly anyone (working or not) could obtain a mortgage loan with little or no down payment.

In fact, today’s homeowners have a have a higher equity position-an average of 40% home equity-than anytime in recent history.

What could cause a bubble in our region? Substantial easing of FICO scores and other qualifying loan criteria, significant increases in unemployment, or a sudden lack of buyer demand caused by rapidly rising interest rates.

Next week we’ll explore how to best protect yourself when buyer in a peak market. In the meantime, here are a few great articles we found interesting.

Washington State Housing Insights by Zillow Chief Economist Svenja Gudell

Windermere Chief Economist Matthew Gardner’s 2018 Forecast

Zillow Research: What We Learned About Housing Over the Past Year

 

View the full market report


ABOUT WINDERMERE MERCER ISLAND

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

windermeremercerisland.com | (206) 232-0446 | mercerisland@windermere.com
2737 77th Ave SE, Mercer Island, WA 98040.

© Copyright 2018. Information and statistics derived from Northwest Multiple Listing Service.