Eastside home sales surge

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, was the presenting speaker at the monthly Rotary Club of Bellevue membership luncheon on Aug. 23 at Maggiano's Little Italy restaurant in Downtown Bellevue.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, was the presenting speaker at the monthly Rotary Club of Bellevue membership luncheon on Aug. 23 at Maggiano’s Little Italy restaurant in Downtown Bellevue.

Scott’s presentation covered an overview on current real estate conditions and an outlook for the next 12 months.

Scott’s presentation began with an overall look at the Eastside residential housing market. He said that when the Brexit vote took place on June 23, interest rates dropped half a percent, creating a power surge of sales activity in an already-frenzy hot market.

“The market hasn’t cooled much, and now we’re just down a few degrees of hotness into a surge market,” he said. “Recently we’ve seen more listings come on the market. The increase in selection for buyers has helped increase sales activity.”

The two key indicators for a strong housing market, job growth and interest rates, are extremely positive on the Eastside.

“Over the past 60 years there’s been considerable change on the Eastside,” Scott said.

He said prices are only going higher in the more affordable and mid-price ranges, and traffic will never get better. Some homebuyers are being forced to adopt a “drive until you qualify” sales technique. This means they have to cast a wider net in order to find a home in their price range.

Scott says the Eastside currently has 1.2 months of inventory supply; five to six months is considered healthy. This means there is a severe shortage of homes for sale. Because of this, the Eastside housing market can expect upper single-digit price appreciation over the next 12 months in the price ranges where 90 percent of the sales activity is taking place.

According to Scott, real estate goes in a yearly cycle when homes come on the market on a monthly basis. Eastside homebuyers basically have two months of selection remaining until new listings coming on the market drop off by 50 percent during the winter.

“This is the fourth year in a row that we are virtually sold out heading into the winter,” he said.

For luxury properties on the Eastside, there is still a shortage of inventory in the below $2 million range and low inventory in the up to $3 million range. Below a million, the Eastside has a severe shortage and can expect that shortage to continue in at least the summer of 2017.

For more information about the Rotary, visit www.bellevuerotary.net.