November Market Update: Slower Market Gives Homebuyers "Newfound Ability to Negotiate"
KIRKLAND, Washington (November 6, 2018) - Seven months of steadily rising housing inventory reversed course last month when Northwest Multiple Listing Service brokers added the fewest new listings since February, according to a new report.
MLS members believe the onset of wintry weather and transition to the holiday season are factors for the market slow down, but suggested the slower pace also signals improving conditions for house-hunters. "After months of inventory growth that more than quadrupled the number of homes buyers have to choose from, things got back on a seasonal track with new listings and total supply falling," said Robert Wasser, a director with Northwest MLS, when comparing the previous months metrics.
Some Quick Facts and Figures:
- Last month's number of total active listings shrunk nearly 6.7 percent, but year-over-year inventory rose 33.2 percent, from 13,680 to 18,223 offerings.
- "Home prices in King County are up nearly 8.6 percent year over year, so we're still experiencing significant appreciation," stated Real estate veteran Mike Grady, the president and COO of Coldwell Banker Bain.
- The volume of closed sales declined nearly 11 percent area-wide, although eight counties reported double-digit year-over-year increases.
- Commenting on the latest MLS statistics, J. Lennox Scott noted "unsold inventory levels are higher than we've seen in the past three years," adding, "We've gone from being virtually sold out in many areas close to the job centers to healthier inventory levels.
Why Should You as a Buyer ACT NOW?
After months of inventory growth that more than quadrupled the number of homes buyers have to choose from, things got back on a seasonal track with new listings and total supply falling. We're now entering that time of year when historically the market slows a bit as we head into the holidays and this slower pace also signals improving conditions for house-hunters.
Buyers continue to see an improving market compared to last year with the inventory increasing to 2.4 months of supply in King County, compared to the year-ago figure of less than a month and because of this, buyers are catching on to their newfound ability to negotiate.
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. Other buyers will have decided to take things slow due to the run up to the holidays but know that there are serious sellers out there like you who would very much like to start their new year with a clean slate.
How is This Relevant to You as a Seller?
"Home prices in King County are up nearly 8.6 percent year over year, so we're still experiencing significant appreciation," stated Real estate veteran Mike Grady. Given continued reports of hiring by companies in the Puget Sound region and recent increases in inventory, he expects homebuyers will continue entering the market, adding, "And sellers can still expect to get good prices -- all this without the frenzy. A win-win,"
Brokerage owner George Moorhead of Bentley Properties has noticed a "significant uptick in buyer activity during the past three weeks," calling it typical for this time of year. "Buyers are more than testing the waters as they see better pricing, less competition, and have a desire to secure their next home for the holidays."
Currently and even with the market slow down, buyers still have more choices and are at this point using their newfound negotiating prowess to try and get to the price they would like to see. One thing to note is that when choices are more abundant, buyers become more discerning. With this, sellers are also being advised to become more discerning with their asking price because at this point, that's the pathway to being sold.
For sellers, experts say that many are feeling the market change because longer market times upset their expectations of a quick sale. A lot are responding to this change by capturing available buyers with competitive pricing, or by quickly adjusting their prices. 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.
For home buyers, experts say that the current market provides opportunities for those looking to move before the New Year, even with a home-to-sell contingency. The increase in standing listing inventory brought more choices to buyers and the meteoric price increases of the spring market have slowed. The recent influx in inventory guarantee that there are still 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. So take note that this is the right time to be prepared when you see the right house. 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.
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