Is it still a buyers’ market? Not so much.
Sometimes the local real estate market changes so quickly it can make your head spin! Now is one of those times.
You may think I’ve been sounding like a broken record the last 6 months or so, telling you that our biggest problem in West Seattle real estate is a lack of inventory. I wasn’t kidding, and it’s still true.
In January of 2012 there were 352 Active listings in West Seattle and 84 homes sold. In January of this year, there were 184 Active listings and 98 sold. That translates into 24% sold in 2012 vs. 53% in 2013! That doesn’t leave much inventory to choose from. Try as you might, there is no way around the law of supply and demand. It will always be true that when supply is low and demand is high, prices will go up. How much and how quickly they will go up is difficult to predict. Until recently (just the past month), buyers were being fairly conservative, refusing to repeat the feeding frenzy of just a few years ago, so price increases have been moderate. Brokers often heard their buyers say, “We won’t be part of a bidding war.” Believe me, brokers don’t like to participate in bidding wars any more than buyers do; everyone emerges with a bad taste in their mouth.
For better or for worse, however, buyers have taken off their gloves and gone back to offering well over the asking price, paying for pre-inspections and anything else they can think of to give themselves an advantage over competitors’ offers. In the past 4-6 weeks, multiple offers on new (and some old) listings have become the norm again. The only saving grace for buyers is that interest rates remain low, which helps keep mortgage payments more manageable.
The good news for homeowners is that you are regaining some of the equity you lost during the downturn. And, of course, if you decide to sell now/soon, you stand a much better chance of getting a reasonable price for your home. Keep in mind, however, that appraisals can be a stumbling block to financing. E.g. a house that goes on the market listed at $300,000 might get bid up to $350,000 but if the bank’s appraiser can’t find other comparable sales to justify that price, the buyers won’t be able to obtain financing and the whole deal will fall apart. This is a very real danger since appraisers are under a much more watchful eye now than they were before the downturn.
Wondering how much your house is worth today? Call me for a free market analysis.
Know some buyers who have been waiting to buy? You might want to give them a nudge. The bottom of the market is waaaaaay behind us.
(Reprinted from my monthly newsletter. Statistics are from the Northwest Multiple Listing Service.)