August Market Update: More Buyer Options While Seller "Gridlock" Loosens
KIRKLAND, Washington (August 6, 2018) - "Home sellers throughout the Seattle region are experiencing a reality check and the days of multiple offers are days of the past," was how one director with Northwest Multiple Listing Service summarized the market upon reviewing the statistical report for July.
Today, we see that the continuous shift in the market that started last June has finally ended with the market finally flipping from being a seller's market to that of a buyer's one. New figures from Northwest MLS show year-over-year improvement in inventory (up 6.5 percent), but modest drops on both pending sales (down slightly more than 7 percent) and closed sales (down 3.4 percent). Several industry leaders commented on the steadily improving supply. "In Seattle and King County supply is at the highest level since first quarter 2015", remarked Robert Wasser, owner of Prospera Real Estate and an officer of the Northwest MLS board of directors. "People are taking notice of the evolving real estate landscape -- even my mom tells me she's noticing more for sale signs!"
Some Quick Facts and Figures:
- Mike Grady, president, and COO of Coldwell Banker Bain noted the inventory in King County has doubled since March from 0.8 months to 1.5 months of supply.
- King County's number of active listings surged nearly 48 percent from a year ago, rising from 3,465 active listings to 5,116 while Snohomish County also had double-digit increases, up nearly 15.8 percent.
- "While we are experiencing record sales activity for the higher end and luxury markets in the year 2018, a record number of new listings is coming on the market in these price ranges. This has resulted in more opportunities for home buyers and lower premium pricing from the spring market," stated J. Lennox Scott, chairman, and CEO of John L. Scott Real Estate
- Northwest MLS data shows a 32.5 percent increase in the number of homes that sold for $2 million or more so far this year compared to the first seven months of 2017 (up from 477 to 632 closings of homes and condos in this price segment).
- MLS director John Deely said the change in the market "is more accentuated this year by the historically low inventory that we have been experiencing over the past several years. What now seems like a meteoric increase in inventory is in part caused by the many potential sellers who have been on the sidelines that are now coming to the market," added Deely, the principal managing broker at Coldwell Banker Bain's Lake Union office.
- George Moorhead, designated broker at Bentley Properties, is noticing an increase in the number of price reductions for actively listed homes as inventory increases, "even in the hotspots in Seattle and the Eastside. We are seeing a continued shift from move-up and luxury home buyers to more first-time buyers, which is consistent with the flattening trends we are seeing in today's market."
Why Should You as a Buyer ACT NOW?
From the looks of it, the market shift has now ended and buyers not only will have more options to choose from but may have their pockets rewarded as well. "It has been a long time coming, but we finally have some solidly good news for buyers in the Puget Sound area," commented OB Jacobi, president of Windermere Real Estate. He noted the number of single family homes (excluding condos) for sale in King, Pierce, and Snohomish counties in July was up 10.4 percent compared to June and up 20.5 percent year-over-year.
Escalating prices and depleted inventory in desired neighborhoods are top concerns usually heard from buyers prior to this, however, "The increase in listings is clearly having a calming effect on prices while also giving buyers in the region somewhat of a reprieve from the frantic market of months past," added Jacobi.
One thing to note in all of this is that if you are still in the looking/window shopping stage, now is the time to step up your game. While other buyers have decided to take things slow, there are reports of strong open house traffic where a broker arrives for an open house he had scheduled for a new listing to find six cars were waiting. By the time the open house concluded, more than 30 people had toured, eight offers were made, and the home sold for more than the list price.
How is This Relevant to You as a Seller?
"It's not such a crazy, go-go market, but it's still a great time to be a seller," stated Northwest MLS director Mike Larson, president of Allen Realtors in Lakewood. The expectation of multiple offers and the ability of sellers to simply dismiss inspection repair requests is behind us," he believes.
With the additional influx of new listings in the market, buyers now have more choices and sellers at this point are said to be experiencing a reality check. Most, are having to come to grips with the words: 'price reduction' and 'increased market time'. However, sellers are also being advised to "take a collective deep breath and enjoy the ride" because as it is, this is still a seller's market. Much more inventory is needed to meet the overall demand for quality homes. So it is best to heed the experts' advice because today is probably the day when you'll see the highest possible sale price for your property.
For sellers, experts say that multiple offers continue to follow homes that are well priced at or below our median price level. "Sellers need to understand that the days of doing a market analysis and then pushing the envelope on the list price an extra 5 percent is gone and they need to find a listing broker who also understands that. However, there is one other thing to note especially if your home is in the median price level: "For homes priced below a million dollars, the sales intensity for new listings has come off the extreme frenzy in the spring to just frenzy" meaning that you still have a market out there and while it has been reported that there is an influx of new inventories, experts are seeing a continued shift from move-up and luxury home buyers to more first-time buyers.
For home buyers, experts say that the next three months will be the best time for selection and availability of new listings until March 2019. They believe that there has not been a better time in the last three years for a buyer to enter this market with more options and less competition. So take note that this is the right time to be prepared when you see the right house. The recent influx in inventory guarantee that there will now be plenty of options for you to choose from and while there will still be competing at some level - whether on price, shorter inspection times, larger earnest money deposits or fewer repairs being done by sellers - it's better than before. Make sure you have your updated pre-approval in hand together with a realtor who knows the market inside out and has the experience to navigate its fluctuations to your advantage. Finally, if you are thinking of relocating and are concerned that your current home's value just dropped, it is best to start moving. Contact a trusted realtor now and get an updated home value.