As 2019 begins, the bustling technology sector in the Seattle area is likely to continue fueling Mercer Island’s housing market, though there will be some changes. When looking back on December’s market on Mercer Island, the median sales price grew from $1,411,000 in December 2017 to $1,530,000 in December 2018 – about an 8-percent increase. In the luxury market on the Eastside, there is low inventory paired with strong sales intensity up to $1.5 million, then selective buyer activity above that price point.

Recently, J. Lennox Scott, John L. Scott’s chairman and CEO, released his forecast for the 2019 housing market in Puget Sound. Scott noted that despite some headwinds in the residential housing market, there are many positive signs, including job growth, millennials entering the market and interest rates that are still historically low.

“Heading into 2019, we anticipate the more affordable and mid-price ranges in all markets will go up one level of hotness after Jan. 1 to a surge level of sales activity intensity, then transition back down to strong for the remainder of the year,” Scott said. “From January to April, we will see a mild increase in the median home price appreciation, which shows up in closings into June. Then, price appreciation tends to flatten out the remainder of the year due to the large number of new listings that come on the market over the summer, creating dispersed buyer energy.”

I agree with Scott’s predictions for the next year, and I expect we will see more inventory come on the market in the late spring on Mercer Island. The economy is doing well overall, despite the fall on the stock market, and Seattle’s consistent growth in the technology sector bodes well for our local housing economy. When looking toward the spring, we’ll certainly see a different market from last year, but I think we are still poised to have strong growth.

Recently, ATTOM Data Solutions released a Home Affordability Report, which found the median home price in the U.S. reached the least affordable level since the third quarter of 2008. However, the report notes that the Seattle market saw annual wage growth outpaced annual home appreciation, which is encouraging for those looking to own. Some of the wage growth can be attributed to the continued expansion and investment in the area’s technology sector from companies like Amazon, Microsoft, Expedia, T-Mobile, Facebook, Google, Apple and Indeed, which sets a strong base for the local economy.

I see this as great news for our market – it means our local economy is producing high-quality jobs that enable people to achieve their home ownership goals. Real estate truly is an investment into your future, and the key to this investment is to become a homeowner as quickly as you can. Many times it can be cheaper than renting, and you’ll build equity with the market appreciation while you pay down your loan.

We see many clients that then use this built-up equity to purchase a bigger home – or alternately rent out their old home with cash-flow positive income. While purchasing a home isn’t right for everyone, I always recommend starting the conversation with a lender and real estate broker early to determine the best plan of action when it comes to home ownership.

Two key factors have moved affordability in a positive direction for potential home buyers — interest rates, which have lowered down to the mid-four range from the low five percent range, and premium home pricing adjusted off the spring 2018 high back down to current market price. Although unsold inventory of homes for sale is still considered a shortage, the larger number of unsold homes, combined with new listings, will moderate the price increases in the more affordable and mid-price ranges in 2019.

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 for John L. Scott Mercer Island.