Lower inventory, higher interest rates have turned up the heat in an already hot residential real estate market

Prices in Mill Creek continue to set records as buyers discover ‘the hidden jewel’
By Dan Aznoff | May 03, 2018
Courtesy of: John Roka This Mill Creek condominium was only on the market for five days before it sold for $10,000 more than the asking price. Mill Creek Realtor John Roka explained that low inventory coupled with higher interested rates has created a new level of frenzy among potential buyers.

It seemed impossible, but the scorching hot market for residential real estate in Mill Creek has become even more competitive as prices continue to climb at a pace that exceeds the record-setting increases in Seattle and the Eastside.

The median price of a home in King and Snohomish County surged by almost 9 percent between this last month and March of 2017. Those numbers pale by the jump in the sale price of homes in Mill Creek, where the value of homes seem to increase before the new owners could even move in, according to Mill Creek resident Cassy Reichelt with Windermere Real Estate in Alderwood.

Reichelt said the average price of a single-family home in Mill Creek surpassed $500,000 last year. She had no predictions for how high prices might reach

“There is still a shortage of inventory and the days on the market seem to shrink every month,” Reichelt told The Beacon. “In the past, we would do a market analysis for buyers one year after the purchase. But that has all changed.”

The 20-year veteran of Real Estate in Snohomish and North King County said she had one buyer move into a home that sold for $750,000 last year. The market value of the home, she said, increased into the high $800s before the new owners had finished unpacking their boxes.

The buyers of a home in Mill Creek she sold for $510,000 in January received an unsolicited offer of $650,000 immediately after they had closed escrow.

“People are being priced out of Seattle and the more desirable communities on the Eastside,” Reichelt explained. “They come north and are almost surprised when they discover the hidden jewel that is Mill Creek.”

Buyers, she said, turn to Mill Creek when they realize they can save between $150,000 and $200,000 compared to similar communities in Mukilteo and Bothell.

“They are genuinely shocked when they realize the quality of the community and the excellent schools the city has to offer.”

John Roka predicted that Snohomish County will follow the pattern established in the other desirable locations. He said multiple offers, short sales cycles and sales prices well above the asking price will become normal.

“People are anxious to escape the city of Seattle,” said Roka. “They look north in hopes of finding something within their price range.

Working as a buyer’s agent, Roka recently helped a couple negotiate the sale price on a condominium in Mill Creek. The unit was on the market for a total of five days and sold for $10,000 over the asking price of $265,000.

The recent boost in interest rates has created a new level of urgency among buyers.

“Serious buyers want to close on their new home before they are priced out of the market,” he said.

Spring is traditionally the start of the busiest time of the year for real estate professionals.  Homes often selling for well above the original asking price, said Roka. Despite the lack of inventory, pending sales in North King and South Snohomish counties were up 114 percent in April compared to the same month in 2017, according to statistics released by Windermere Real Estate.

The appeal of Mill Creek is two-fold, according to Reichelt. She said buyers are attracted to the quality of the neighborhoods and the excellent schools. Many decide to move based on the affordability, especially lower property taxes compared to King County.

The lack of building sites has also impacted new construction, according to RedFin Realty. Housing starts for single family homes in Washington were down almost 4 percent in March compared to a year earlier. The number of applications for building permits declined by 5.5 percent in Washington this past March.

The numbers in Mill Creek are even more dramatic. There were a total of five building permits for new residential construction in the city all of last year. So far in 2018, that number has dropped to zero.

The lack of inventory is also the result of homeowners who are reluctant to sell their homes in fear they will not be able to find another home that meets their needs. Reichelt explained the situation is worse for some of her senior clients.

“Seniors who continue to live in the same home where they raised their family are often overwhelmed with the burden of maintaining the home and frightened at the prospect of packing up and moving even though they want a smaller home and a simpler lifestyle,” Reichelt said. “They know Mill Creek is safe. The city offers a continuity of quality.”

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