For the first time since March 2006, the housing market recently experienced a massive boom in home prices. According to ABC News, nationwide prices increased a whopping 10.2 percent in February from January. The largest explosions occurred in the Western half of the nation, with Nevada and Arizona finishing at the top. Washington was not far behind, ranking as the 9th most rising market at 11.1 percent. The current average Seattle sales price is approximately $400,000, nearly a $50,000 increase from last year!
For 12 straight months home prices have steadily increased. Short sales and foreclosures have lessened as prices continue to trend upwards. We have also seen a consistant rise in the supply of homes for sale, confirming that confidence in the housing market has finally returned just in time for the critical spring-buying season.
This is amazing news for everyone. Let me explain why:
Home prices are vital to an improving economy. An upturn in the housing market sparks more refinancing, enables employment-related mobility, and can even inspire more homeowners to remodel. Surging sales prices create a phenomenon called the wealth effect, which effectively encourages more consumer spending (the foundation for economic expansion). This is a circular effect, meaning more homeowners will sell their homes and buyers are incentivized to purchase homes before prices rise even further… which entices homeowners to sell! The housing market is now leading (versus restraining) economic growth.
This spectacular nationwide price boom is something that you, me, and the U.S. economy should be celebrating!
If you or someone you know is in the market for purchasing or selling a home, now is the perfect time to transition given the historically low interest rates and rising house prices.
Contact Team Troy to become fully prepared in your financial endeavors: 206.504.3660.
Check out the current price trends in Seattle: Current Market Analysis
*Sources include ABC News, CalculatedRisk, and USA Today