McGarty Minute: Debt and Traffic
Welcome back, it's your weekly reminder that it's Friday and it's already Memorial Day weekend, the unofficial start to summer. It's time to break out your white suits, but most importantly it is our opportunity to honor the men and women who died while serving in our military.
If you are joining the masses and plan to head out on an adventure this weekend, be sure to check out WSDOT's traffic prediction charts and pack your patience. And for a good chuckle, follow their twitter and instagram.
Speaking of traffic, wow it's bad out there every day now that Amazon is back to work. GeekWire dove into the data and found that "commute speeds dropping by as much as 35% on routes in and out of Seattle." And by speed, they mean actual speed of miles-per-hour.
It was a mixed bag in real estate this week. As expected, sellers held off listing homes in advance of the holiday weekend. The buyer pool shrunk because of mortgage rates moving back above 7%, FUD about the debt ceiling as well as the upcoming holiday weekend. However, there was still enough demand for bidding wars at the hot properties which we'll dive into in the Notes From The Field. There was no new local real estate news to report, but there was some international real estate news worth mentioning. We were quoted in another Nikkei article this week. Using Google Translate (it pops up if you're using Chrome), it said that I said, "'We're still seeing a lot of bidding wars on good properties,' said Rob McGarty of Bushwick, a real-estate agent in Seattle. 'It sold for a high dollar'" Using another web browser, the translation was "Rob McGarty of Bushwick, a real estate agent in Seattle, 「 There are still many bid matches in a well-conditioned property. Eleven hopes of buying a house for $875,000 in the suburbs, even in the suburbs, say 」 sold at a high price of $1 million." Either way, the message came through, the market is still hot for good homes.
The debt ceiling is top of mind for many and is not doing us any favors with mortgage rates. Altos Research dove into some of the data about what impact this will have on the real estate market. NPR has a good explainer for what's going on.
Quick reminder of what we're talking about—The "debt ceiling" or "debt limit" is a cap on how much debt the federal government is allowed to accumulate. Congress is constitutionally required to authorize the issuance of debt. Doing so then allows the government borrow to meet its existing legal obligations like Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.
You should care about this because if the US defaults, the economy will become a disaster and your investments will likely lose a ton of value. But what can you do about the debt ceiling? The answer is likely nothing. Instead focus on controlling the controllables—and swaying the government's mind is likely not one of those. This means ensuring that your financial house is in order. Hit reply and we can personally help you with the basics as well as connect you with a perfectly matched financial planner for the rest.
Since there's no real estate news/data to report this week, we're making our own. We just refreshed the pending (homes that went under contract) data year to date and we're still seeing slow and steady growth on the number of homes going under contract every week (see purple 7-day moving average), but it's still nothing like a typical year. I was surprised to see such a spike at the end, right before the holiday weekend. Expect next week's chart to take a breather.
For reference, here's our annual cycle of pending sales over the last five years. We are currently sitting at levels typically only seen around the holidays.
Diving into the mortgage news, Mortgage News Daily reported that "Mortgage Rate Highest in More Than 6 Months". We're now back above 7%. Reminder, you can always refinance to a lower rate in the future.
Ending on a fun note—some of our favorite and five-time clients' home remodel was just featured in West Sound Magazine. It's amazing to see D&B's vision come to life. It looks nothing like what they started with. Wow! Do you have a home project that you'd like to share? Hit reply!
By The Numbers
This week we saw 206 new listings hit the Seattle / Bellevue / Kirkland areas, down 34% from last week's 314 which was no surprise heading into the holiday weekend!
