Change to U.S.-backed condo loans comes as summer market wraps up

Change to U.S.-backed condo loans comes as summer market wraps up

A monthly real estate snapshot by John L. Scott Real Estate.

  • Wednesday, September 18, 2019 1:30am
  • Business

By Erin Flemming

Special to the Reporter

Though the local real estate market tends to be a bit quieter in August due to summer vacations, Julia Nordby, office leader and business coach of John L. Scott’s Bellevue-main office, said she’s optimistic about Bellevue’s market given the low current interest rates and very positive job growth.

“In Bellevue, we have slightly more than two months of inventory in most price ranges, which is up about a month from last year,” Nordby said. “This is still a seller’s market, but you get up to $1.7 million, the inventory is closer to four months, which is considered healthy. In our local market, we’ve found that buyers have thoroughly relished in their options – this shift in selection means they can take a bit more time to find the home that’s perfect for them.”

Looking ahead, Lori Weaver, a broker from John L. Scott’s Bellevue-main office, said the market is still competitive in Bellevue, especially for condo properties that attract investors and often garner multiple offers. Condos are another area of opportunity Weaver sees locally, with many available on the Eastside for $400,000 and less.

“Based on the months of inventory and absorption rate, we are still in a seller’s market – but the pressure has eased up significantly compared to 18 months ago,” Weaver said. “Properties are staying on the market a bit longer, so there are lots of options for those looking to buy. However, buyers should still expect to pay close to list price throughout King County.”

Though the local real estate market in Bellevue didn’t offer up any major surprises in August, the real estate industry is abuzz with a change to laws surrounding low-down-payment loans for condominiums. The Federal Housing Administration (FHA) announced in August that the U.S. will back more condominium loans, a change that is aimed at helping first-time buyers.

The National Association of Realtors (NAR) and others expressed support for the change, arguing in cities like Seattle, expanding opportunities for first-time buyers to purchase a condo is a welcomed change. Weaver echoed the sentiments of NAR, saying the change should alleviate some of the pressure in our local market, where growing demand has outpaced supply in recent years.

“I’m excited to see this change — it’s been a long time coming,” Weaver said. “Expanding low-down-payment loans for condos will help make housing more affordable for families and allow many to purchase their first home. Locally on the Eastside, it could also help move condos at a quicker pace.”

According to a new analysis from Attom Data Solutions, homes within a close range of popular food stores such as Trader Joe’s and Whole Foods have high home value rates and investment returns. There has been a lot of development in Bellevue over the last few years, with much more slated to come. Weaver said one area of Bellevue that remains popular with clients is Wilburton, due to its proximity to downtown, wooded areas, top schools and relative affordability.

“Wilburton really has a lot to offer, and the development of the Wilburton Village project will bring a PCC Community Market, Target and Virginia Mason medical clinic to the west side of the neighborhood,” Weaver said. “This project will definitely draw more people and jobs to the area, which is great. The Wilburton Light Rail will also increase the home value and investment returns of the neighborhood going forward.”

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