Everyone knows that housing in Black Diamond is booming, but what is happening in Enumclaw and Buckley?
In short, a lot. After a decade-long water and sewer moratorium and the 2008 recession, Enumclaw is experiencing nearly 15 years-worth of pent-up development in almost a single go.
And across county lines, Buckley just cooled down from a scorching-hot rush of housing construction, though the city is poised to see the fastest growth in its history since the mid 1950s.
Consider this article series your housing development primer. Two weeks ago, we examined how development requirements are set, how projects move through the city planning process, and what projects are currently in the works. This week is all about the current housing market and how to glean what could be in store in the near future. Part three will take a look what can be expected in the further distance and how you, as a resident and taxpayer, can steer the inevitable growth of your city.
Given that Black Diamond is experiencing massive growth, thanks to the master Ten Trails development, we are currently only looking at Enumclaw and Buckley.
WHAT GOES UP…
The housing market is always in flux, but these last few years have been extra hot, and buyers and sellers are now adjusting to a more historically realistic market.
According to Alan Smith, a broker with John L. Scott, and Payton Grace and Carlie Hendrickson of Renaissance Real Estate, the country is coming off what’s known as a “frenzy market” during the pandemic.
That means houses put up for sale were going fast, fast, fast — to be specific, 75% or more of home sellers began the contracting process within the first 30 days of the house being listed.
“Some homes were only on the market for a few hours,” Hendrickson said.
This was due to two big reasons: the record-low interest rate created by the Federal Reserve System, and an extremely limited supply of homes.
Those two factors created a strong seller’s market where buyers were “waiving financing contingencies, inspection contingencies (and) offering non-refundable earnest money” to get a leg up over other offers, Hendrickson said. “It was very, very intense.”
“For two years, you almost didn’t have time to say, ‘What’s your dream home look like?’ because it didn’t matter,” Smith said, adding that interest rates once even dipped into a “crazy” upper 2% range. “Your dream home was going to be what you were able to get.”
… MUST COOL DOWN
But the country’s economy is now heading in the opposite direction due to inflation. With the Fed artificially increasing interest rates, “There’s a pent up pool of buyers right now that are sitting there because they don’t know financially if it makes sense to jump right now or wait a week” for a better interest rate, Smith continued.
And now that buyers aren’t as eager to pull the trigger, homes are starting to stay on the market longer.
“Inventory has drastically increased, so there’s a lot more options for buyers,” Hendrickson said. “Buyers are able to satisfy their wants and needs a little bit more.”
That means sellers have to adjust their prices. Market data shows that back in July 2021, sellers were getting, on average, 2% over their original listing price; at that time, the average Enumclaw home was being sold for $600,000, so that translates to an additional $12,000.
But just last month, sellers are now finding they are needing to reduce their original listing price by as much as 10% in order to compete with other similar homes for sale in the Enumclaw area.
That doesn’t necessarily mean sellers aren’t getting their money’s-worth for their home; “A lot of that, in my opinion, there’s still a lot of real estate brokers out there that don’t have the courage to tell their clients what it really needs to be priced at,” Smith said.
Despite these recent changes, it’s still a seller’s market in the Plateau area, just not as strong of one.
“It’s a more balanced market. Not necessarily one over the other,” Grace said, with Hendrickson adding, “There’s more negotiating on both sides.”
ARE PRICES INCREASING OR DECREASING?
Home prices might drop here and there in the short run — but on balance, there’s nowhere for them to go but up.
“When people say prices are coming down, I think that’s because they’re noticing that… the pencils aren’t really sharp when they put a home on the market. So in a couple of weeks, they end up lowering the price. That’s what people see,” he said. “But the median prices are based on what actually closed, and those are still trickling up a little bit, because the Pacific Northwest is still kind of a hot bed for the country.”
According to Redfin.com, the general trend for the median sale price over the last five years hasn’t just gone up, but even by double percentage points up during the pandemic years. In January 2020, the median house sale price was $601,000.
By the following year, it was $660,000 — a nearly 10% increase.
And in January 2022, its was $730,000 — a 10.6% increase from 2021.
Since last May, prices have been dropping, from a median of $888,000 (a nearly 14% increase over the previous May) to just over $802,000 in September. However, September’s median sale prices are still about 7% over what they were in September 2021.
“The median price range is still trickling up, but it’s not double digit gains like it used to be,” Smith said. “It used to be kind of a gallop; now it’s just a little trot.”
WHAT’S HAPPENING WITH INTEREST RATES?
The short answer is — who knows?
“I put my crystal ball away, because I don’t think it works anymore. I don’t even take it out of the closet to look at it,” Smith said. “If the Fed keeps pushing the inflation button, they could go up. But I don’t know.”
His colleagues at Renaissance, though, seemed confident that interest rates will fall in the near future.
“What we’re hearing from the experts and our local mortgage brokers is that they expect them to continue to rise until the end of the year, and then balance out in… the spring of 2023” to around 4%, Grace said, adding that’s when brokers will see a refinancing boom.
How that will affect home sales is unclear, and depends a lot on housing availability.
Market data shows that Eumclaw had less than a month’s-worth of homes for sale back in July 2021, which helped fuel the frenzy market.
But last month, Enumclaw had two month’s-worth of housing inventory — so it still favors buyers. If monthly inventory increases more over the coming months, though, the power will shift.
“The magic number is five months of on-hand inventory,” Smith said, adding that number is a generally accepted measurement, though he doesn’t necessarily agree. “Anything less than that favors the seller, because it means houses are selling quickly; anything more than that favors the buyer, because houses are taking a long time to sell.”
THE LOCAL HOUSING MARKET BY THE NUMBERS
Data for the Enumclaw and Buckley housing markets changes every day, let alone every month, so it’s always best to check in with your local broker for the most recent numbers.
Number and age of homes sold
Between October 2021 and October 2022, 453 homes were sold in Enumclaw, and 407 in Buckley.
Despite both areas experiencing a surge of development, the vast majority of those homes are at least 20 years old: about 82 homes sold in Enumclaw between October 2021 and 2022 were built before 1950, and another 258 before 2000. Only 119 homes from the currently century were sold during that time frame.
Buckley had more newer homes that were sold: 36 pre-1950 homes were sold, and another 190 from between 1950 and 2000, during the aforementioned time period. But 194 homes built after 2,000 were also sold.
Price of homes
Of course, it’s not the number of houses that are being sold that matters to most people — but who can afford them.
Between the two cities, Buckley appears to be the more affordable, having sold two homes under $400,000 and 29 homes between $400,000 and $600,000 between October 2021 and October 2022.
On the other hand, Enumclaw saw no homes under $400,000 during the same time period, and only 13 homes under $600,000.
In the upper echelons, Enumclaw saw 27 homes between $600,000 and $1 million sold, whereas Buckley sold 22 in that range.
As for homes sold for more than $1 million, Enumclaw saw 11 sold, and Buckley 7.
Listing prices vs. selling prices
The average listing prices and actual selling prices in Enumclaw have varied wildly between July 2021 and September 2022, with some wide anomalies that likely account for some of those $1 million-plus homes being sold during the winter season.
Last September, the average listing price is $882,000, though the average sell price was between $677,000 and $771,000. In October, the average original listing price increased to $907,000. (However, there were several $1 million or more listings that have skewed the data.)
Buckley had a similar anomaly to Enumclaw’s last December, but even more interestingly, the actual sale price of $734,000 in March 2021 actually exceeded the listing price of $664,000.
Last September has evened out even more than Enumclaw, with the average listing price roughly $632,000, and the actual sale price around $612,000.
Days on the market
Back in July 21, the average number of days a home was on the market was nine in Enumclaw, and 26 in Buckley.
Last September, this has increased in Enumclaw to around 34 days; Buckley had remained about the same, around 27 days.
In July 2021, Enumclaw’s housing stock was only 0.7 — meaning the city had less than a month’s worth of houses to sell that month, given how quickly they were being taken off the market.
The stock has fluctuated, of course, but as of last September, Enumclaw had about two months of housing supply.
Buckley’s housing stock has been even more erratic: it only had a stock of 0.2 in July 2021, which expanded to 2.3 last July, but that has dipped back down to 1.4 in September.
As of Oct. 12, there were around 50 active homes in Enumclaw, and 51 in Buckley.
TIME TO BUY?
And now, the age-old question: “Is this a good time to buy a home?”
“I think it is, if you can afford what it takes to get in the game, knowing that you’re going to refinance down the road,” Smith said. “You need to look long-term. Even if you’re going to live in this house for five years, you’re probably not going to live in this loan for five years.”
He added that there are mortgage programs out there that will let buyers be locked in at a certain interest rate, but when it’s time to pull the trigger on the house, potentially adjust that rate lower if the market has shifted in that direction.
Hendrickson and Grace agreed.
“I think it’s always a good time to buy, if you can afford the house, and it’s the house that you love… take advantage of prices coming down for the moment, and refinance in a year to get the payment that you want,” Grace said.
“Don’t let the rates scare you right now,” Hendrickson added.