One real estate agent in town says there’s never been a better time to sell a home in Puyallup.
Redfin agent Lindsay Weingart reported September prices in Puyallup showed a 15.3 percent increase compared to last September. On average, houses spent 29 days on the market, and the median home price fetched $235,000, she said.
“Homes are selling a lot faster than they were six to eight months ago,” Weingart said. “Sellers are finding more confidence in listing their homes. They can get out from underneath their home, and they can get on to bigger and better things.”
A spike in prices is a result of low inventory on the market, Weingart said. At the height of the market in June 2007, people bought homes for high prices, and then the bubble burst and forced values down.
“They couldn’t turn around and sell their home,” Weingart said. “People are still having to wait. It’s the lowest amount of inventory in five years on the market.
“It’s the law of supply and demand,” she said. “When you have low inventory, you are going to see higher prices. There will be a lot of buyers desperate to get into something.”
Leading into September, Weingart said the Puyallup market was hot. Redfin reported 146 homes were sold in Puyallup last month and sales were up 17.7 percent compared to September 2012.
Ellen Haberle, an economist at Redfin, said the national average mortgage rate at press time was 4.13 percent, according to Freddie Mac. Haberle said mortgage rates have averaged about 6.5 percent since 1990, but during the past year, rates have been historically low, averaging about 3.5 percent for a 30-year mortgage.
“This has sparked more demand for homes,” Haberle said. “During the economic crisis, many people delayed their home-buying plans because home prices were falling. Once prices bottomed out in 2012, the low prices and very low mortgage rates drew buyers back into the market.”
The Federal Reserve has purchased billions of dollars worth of mortgage-backed securities and treasury bonds to keep interest rates low and stimulate the national economy during the past year. Haberle said the Fed began to hint in mid-June that it would begin to reign in its purchases. That caused mortgage rates to spike to about 4.6 percent, she said.
The Federal Reserve chose not to reduce its asset purchases in September, leading mortgage rates to decline again, Haberle said.
“When the Fed believes the nation can rely on its own two feet, it will start pulling back on buying asset purchases,” Haberle said. “This is what we expect for this spring. Once the Fed makes that decision to begin to taper, or the market expects the Fed to taper, we will see those mortgage rates rise again.”
Haberle said a spike in mortgage rates will weaken buying power. For example, a mortgage rate jump from 3.5 percent to 5 percent on a $300,000 loan would cause monthly payments to jump from $1,347 to $1,610.
“If you’re on the fence, thinking about buying a house, do it sooner rather than later,” Weingart said. “Mortgage rates are expected to continue to rise, and we’re probably not going back to that 3 percent.”
For Puyallup listings on Redfin, visit http://www.redfin.com/city/14679/WA/Puyallup
Reporter Andrew Fickes can be reached at 253-552-7001 or by email at firstname.lastname@example.org. Follow him on Twitter, @herald_andrew.