The Incredible #10 | Weekly Market Update 12.18.2020

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Dec 23, 2020 11:52 AM

By: Kyle Bergquist

The Puget Sound Real Estate Market

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Puget Sound Real Estate:  The Incredible #10

Not just my old hockey number, but according to the NWMLS that’s the 12 month appreciation rate for homes in King County -  Snohomish County was at a 14.34%; Pierce was at 17.92%; and Kitsap was at 15.58% (Ya know, relative to its peers “10” is actually not that incredible).  Anyway, the market is doing great, and has all the makings to support a blistering 2021 buying season. 

BUT WAIT THERE’S MORE!  Did anyone see this little announcement from Redfin?  If the 2000’s were the decade of “i”, the 2010s are the decade of “Now” – I’ll leave it to the Anthropologists in the room to decipher the meaning of those pop culture marketing trends, but I can tell you that if RedfinNow is launching in Seattle, there’s yet another buyer in the buyer pool – And this isn’t just Joe Schmoe down the street.  This is a corporation looking to buy up homes, remodel them, then resell at a higher price.  Long story short, the market floor is getting a lift.  I suspect that with fewer “fixer uppers” on the market due to RedfinNow buying them up with the intention of flipping and selling at a higher price down the road, this will only exacerbate the appreciation growth our region is experiencing – especially in the midmarket price ranges Redfin wants to focus on; as the comps (aka, the recently flipped Redfin homes) are collectively NOW, a little higher priced – Pun intended. 


If we take a look at all the midmarket homes on the market right now, and apply some sort of quality ratio to that segment of homes, we’re left with our current median list price.  Now, if we increase that quality ratio because all of a sudden RedfinNow is buying up fixer-uppers, rehabbing them, then introducing them into said midmarket housing market, our quality ratio is going to increase.  Though small (especially at first), this bump in overall quality will leader to higher sales prices, and therefore a little bit of appreciation in that segment as RedfinNow gets things going here in Puget Sound. 

Alex Black Absorption Rates per NWMLS Real Time Data

Absorption Rate is calculated as:  (Pending Sales) / (Active + Pending Sales)

SFR in Seattle

  • SFR Pending Sales in Seattle:  692
  • SFR Active Listings in Seattle:  764 homes  
  • Absorption Rate for SFR in Seattle:  47.53%
    • What to Watch for During Winter Clean Up Season:  Despite a time a year where median list prices generally fall, put more weight into the absorption rate when gauging the overall health of our housing market.  If the absorption rate holds steady to increases (like it is), then the stage will be set for a very strong Spring housing market, with median prices likely covering their winter losses (and more). 

Absorption Rate Median Price for SFR graph

Condos in Seattle

  • Condo Pending Sales in Seattle:  188
  • Condo Active Listings in Seattle:  702
  • Absorption Rate for Condos in Seattle:  21.12%  
    • After falling to a recent low of 17.66%, the absorption rate for condos in Seattle has increased 19.59% to 21.12%!  This is fantastic news, and should help provide a floor for condo prices to slow their declines, so long as the absorption rate can hold onto its recent gains (and/or continue increasing!).  HAPPY HOLIDAYS!!! 

Absorption Rate Median Price for Condo graph

Seattle SFR Stats graph as of 12.11.2020

Seattle Condo Stats graph as of 12.11.2020

Seattle SFR Median List Price graph (1)

Seattle SFR Price per square foot graph (1)

Seattle SFR Inventory graph (1)

Seattle SFR average days on market graph (1)


Interest Rates

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Per Bankrate.com’s survey of large lenders, the 30 year mortgage interest rate fell slightly this past week to 2.96%, with .31 in discount and origination points.

According to Bankrate, rates have fallen .97% since their 52 week high of 3.93%

(That’s a savings of $269.69 per month on a $500,000 loan!)

Kyle’s Quick Take

As the race for a vaccine comes down the homestretch, interest rates will start to shift their attention to the overall economy and recovery.  In the past few months positive vaccine news would shock the interest rate markets lower, but now with a clearer picture on the vaccine front, interest rates will start to trade on economic news; with good economic news being bad for interest rates, and bad economic news being good for interest rates.  Good economic news will be translated by traders as reasons for the Fed to slow down their purchases of Treasury Bills and Mortgage Backed Securities.  Not wanting to hold an asset that has declining demand, investors will sell out of their positions prematurely, thus causing the price of the mortgage bond to fall, and therefore mortgage interest rates to rise. 

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Mortgage rates this week

Mortgage Interest Rates graph between July 2019 to December 2020

Mortgage rates hit yet another new record low this week, falling even more below 3 percent. The average 30-year fixed-rate mortgage dipped to 2.96 percent from 2.99 percent, according to Bankrate’s weekly survey of large lenders.

A year ago, it was 3.93 percent. Four weeks ago, the rate was 3.03 percent. The 30-year fixed-rate average for this week is 0.94 percentage points below the 52-week high of 3.90 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.31 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.40 percent. This week’s rate is 0.44 percentage points lower than the 52-week average.

  • The 15-year fixed-rate mortgage rose to 2.40 percent from 2.39 percent.
  • The 5/1 adjustable-rate mortgage fell to 2.89 percent from 2.93 percent.
  • The 30-year fixed-rate jumbo mortgage rose to 3.42 percent from 3.40 percent.
  • At the current 30-year fixed rate, you’ll pay $419.45 each month for every $100,000 you borrow, down from $421.06 last week.
  • At the current 15-year fixed rate, you’ll pay $662.09 each month for every $100,000 you borrow, up from $661.62 last week.
  • At the current 5/1 ARM rate, you’ll pay $415.69 each month for every $100,000 you borrow, down from $417.84 last week.

Results of Bankrate’s weekly national survey of large lenders conducted December 16, 2020 and the effect on monthly payments for a $165,000 loan:


Where mortgage rates are headed

In the week ahead (Dec. 17- Dec. 23, mortgage experts (the respondents to our poll) were evenly split, with 46 percent each expecting mortgage rates to remain flat or rise in the week ahead. Just 8 percent said rates would fall.

“Looks like yet another week of little movement, holding rates steady as she goes. There is just not a whole lot of market moving news heading into the holidays to cause any shift in the near term outlook until we start to see infection rates drop,” said Gordon Miller, owner, Miller Lending Group, LLC, Cary, North Carolina.

A refinance is a no-brainer at these rates for millions of homeowners

Rates are at a record low and are expected to stay this way and possibly even go a little lower next year. You can see the forecast from various experts for the month here.

That means more and more homeowners can refinance to cut their monthly mortgage payments. However, refinancing comes with costs that you must make up if you are to profit from a refi.

“Homeowners can take advantage of the low rate environment by refinancing their mortgage, generating hundreds of dollars of savings each month and tens of thousands of dollars in savings over the life of the loan,” says Bankrate chief financial analyst Greg McBride.

The bottom line is anyone with good to excellent credit who wants a mortgage should be able to snag a low rate for some time to come. Even those with tarnished credit can benefit, especially with programs such as FHA and VA loans.


The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates may differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. “Lenders surveyed each week are a mix of lender types – thrifts, credit unions, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.


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