| HeraldNet - Snohomish County's online news source |
 TUESDAY, FEBRUARY 9, 2010 1:26 pm |
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Appreciation is only one barometer of value Question: Do you know what the average percentage of real estate appreciation (i.e., escalation) we've seen in Snohomish County by year since 2002? If not, do you know if the Snohomish County Assessor's Office has info on a Web site or where I could find this information? I would sincerely appreciate any input you could offer.M.C., Everett Answer: The Snohomish County Assessor's Office publishes an annual report that includes appreciation rates for communities within the county. You can find this report at www1.co.snohomish.wa.us. Click on "Departments," then in succession on "Asssessor," "Services," "Forms" and "Annual Reports." However, keep in mind that these statisitcs are based on the assessed value of properties in the county and not actual sales data. To get sales data, go to the Northwest Multiple Listing Association's data site, www.nwrealestate.com/nwrpub/common/mktg.html. The public version of the listing service data shows only the current year and previous year's data. As a real estate broker, I have access to all of the data in the multiple listing computer system, and here is what I found for Snohomish County. Looking just at single-family home sales (not counting condominiums) in Snohomish County for October: October 2002: 865 home sales, average sales price $245,781. October 2003: 1,278 home sales; average sales price $259,585 (a 5.6 percent increase from the previous year). October 2004: 1,116 home sales; average sales price $284,691 (a 9.6 percent increase from the previous year). October 2005: 1,279 home sales; average sales price $342,405 (a 20.3 percent increase from the previous year). Total increase in average Snohomish County home sales price since October 2002: 39.3 percent. But like all statistics, the numbers can be misleading. The oldest cliche in real estate is that "value is determined by three factors: location, location and location." It is a cliche because it's true. While the market stats available at the Web sites listed above can give you some general housing market trends, you can't simply add the specified appreciation rate to your home's previous value to determine its current value. There are many more factors that go into the home value equation, such as whether your home has a view, has a waterfront or is located in a highly desirable housing development. Homes appreciate much faster in some neighborhoods than in others, so your home's value will be determined more by your next door neighbor than by the price of homes in another part of the county. As for appreciation, that depends on the basic economic equation of supply and demand. If you look at the numbers above, you will see a huge jump in the number of homes sold in October 2003 versus October 2002. That's partly due to the fact that mortgage interest rates dropped dramatically in 2003, and they have remained relatively low for the past three years. Low mortgage rates make homes more affordable, which has dramatically increased the number of buyers in the market (demand), while the number of homes for sale (supply) has been dropping. When you have more buyers than sellers, that's called a seller's market because the sellers are in a position to make buyers compete for their homes and drive up prices. As I first wrote a couple of months ago, I believe we have reached the peak of the local housing market. I think that by spring you will see more homes coming on the market and fewer buyers competing to purchase them. That will swing the supply-demand ratio back in the buyers' favor. We may not have a true buyer's market, where there are far more sellers than buyers, but I think an increased supply of homes for sale will cause the rapid price appreciation rates we've experienced over the past couple of years to come to a halt. In some cases, we may even see some price reductions from the peak home prices of this year, especially at the upper end of the housing market. The most expensive homes tend to appreciate the fastest during a housing boom, and their values also tend to fall the fastest when the housing market cools. Now, don't get the wrong idea. I'm not predicting a housing bust, but I do think the market will flatten out for a while after the huge increase in home values we've seen over the past few years. Mail your real estate questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206. Fax questions to Tyler at 425-339-3435 or e-mail him at economy@heraldnet.com. |
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