By Sandra Levin
Special to the Reporter
As January came to a close, the Federal Reserve chose to hold its key interest rate steady, noting the central bank will be “patient” when deciding on future rates. This new wait-and-see approach means that for the time being, federal interest rates will remain stable, which can directly influence adjustable-rate mortgages and home equity lines of credit.
Though the fed is in a wait-and-see mood, there are benefits to buying now versus waiting, including potentially locking in a good interest rate. Allen Scott, senior loan officer at Priority Home Lending, said if consumers examine the news closely, they’ll find that interest rates have steadily declined since November. Currently, the average 30-year-fixed mortgage rate for February 2019 is sitting around 4.41 percent, which is favorable for homebuyers.
“The facts are, mortgage rates are about where we were at a year ago,” Scott said. “These current rates are still at historically low levels and buyers should not shy away from finding their dream home. Most buyers will find the payments associated with a new mortgage are not as high as they may think.”
Besides interest rate incentives, we’ve seen on Mercer Island that the sellers that have a home on the market now are eager to sell and not just testing the spring market. Buyers looking now will benefit from less competition as the cycle starts to build up, plus lower prices that are forecasted to rise as the months go on.
In our local market, we’ve seen an increase of 6.3 percent in inventory in January over the previous month, and inventory levels in January that were also higher than they were a year ago. Home closes were also up from December and last year and the number of pending homes also went up.
New inventory is coming on regularly in Mercer Island’s market, with about 77 residential homes up for sale currently. Brokers in the John L. Scott office on Mercer Island have noticed a healthy number of buyers checking out the many open houses locally, despite the chilly weather.
Transportation in Seattle has been top-of-mind for many in the Seattle area in the past month, with the Alaskan Way Viaduct closing in January in preparation to open up the new state Route 99 tunnel. It’s one of many transportation projects in the works in Seattle and beyond.
Already under construction on the Eastside is the East Link Extension, a 14-mile route that begins in the International District and will have a stop on Mercer Island, then will continue onwards to Bellevue, with a final destination of the Redmond Technology Station.
The expansion of the light rail system in the Puget Sound area is exciting, and the East Link Extension will add to the desirability of Mercer Island for those working on the Eastside or in Seattle. Add that to our strong sense of community, active lifestyle, great schools and smaller town feel, and many will find Mercer Island to be an ideal place to lay down roots.
For the luxury market, we see low inventory paired with strong sales intensity up to $1.5 million, then selective buyer activity.
Sandra Levin is an office leader and business coach at John L. Scott Mercer Island.