Home Prices in Seattle jumps 18.9% from a year ago. The Seattle Times just released a good article about the current Real Estate market in Seattle. Normally when a story like this comes out I am always skeptical about the data. In this situation we are looking at one of the most intense markets this Diva Team has seen in the last 15 years.
So what is going on exactly?
Seattle Housing Inventory is at a 22 Year Low: Back in January the NWMLS released their NWMLS NR (Jan15) report on housing inventory. The quote from the press release that still sticks in our minds here at the Diva team is “The current inventory of homes available for sale has never been lower in my 22 years as a real estate broker,” lamented MLS director George Moorhead, designated broker and owner at Bentley Properties.” But think about how many more people are living in Seattle?
The Seattle Times article references a recent press release by our NWMLS. It is a bit intense to read both but it does give you a really good view on what we are dealing with in the market. The quote below from our Managing Broker, John Deely, perfectly sums up the current Seattle real estate market zeitgeist. And who cannot resist a Cinderella story during bracket season:
“Sellers are currently experiencing the role of Prince Charming as buyers vie to win the Cinderella title by escalating offer prices above market value, releasing earnest money and waiving contingencies normally used to safeguard the transaction,” he suggested. The less fortunate “stepsisters” are becoming shell-shocked after numerous failed attempts.”
Read more here directly from the NWMLS press release: Frenzied Market Frustrating Buyers.
What is Impacting the Market and Creating This Housing Scarcity? The number of actual closed transaction is up 17.7% from last year. Meaning more people are buying and selling homes. But the number of new buyers in the market has way outpaced sellers. Below is our own opinion as to why this situation is happening.
- Renters Being Pushed Into the Market: We are currently getting a several calls a week from renters whose landlords are finally selling their homes after holding on to an asset for a long time that is losing them money. Renters are being given 60 day notices to vacate at the end of their leases. The whole rental market has changed and many of these folks are realizing it is cheaper to buy than rent in some cases. But they have 60 days to make the whole process work. Need advice about renting your home or how to final a rental connect with our Rent Guru Roy>
- Buy Up Sellers Do Not Have Anything to Buy: We personally have a lot of clients who are sitting on a goldmine. But their down payment is locked into their house. Competing in this market with only 5% down and another house to sell is daunting. But do not worry you can read about how to make the leap to the next house with our handy Buy Up Packet
- Never Coming Back Inventory: Divas had a lot of clients buy their third house as their first house back during The War, a.k.a the recession. Rates were 3.5% and you could buy a house with a view in Queen Anne for next to nothing. These people are NEVER SELLING THEIR HOMES!
- Not Making Enough Money to Make Selling the Home Worth It: The Divas Kim and Chavi are in this boat. Chez Diva is a magical place but she has been underwater (we owe more than Chez Diva is worth on the open market) for at least the last five years. We can finally sell Chez Diva but we are only going to walk away with $20,000. But wait – we have a new roof, new boiler, new kitchen, new bathroom, the garden is perfect, we love our neighbors, etc. Give all of this up for $20,000 after selling expenses? I guess we will renovate the basement instead!
- No New Housing Stock: Majority of the new construction is geared towards the $600,000 price point. Folks are building larger homes geared to the tech workers in our city. Back in 2007 and 2008 we toured some lovely new built green construction in the $400,000 price point. Those real estate Unicorns are gone!
How Do you Become the Diva Cinderella and Clean Up in the Market?
- Size Versus Location: Right now $500,000 might buy you a two bedroom condo on Capitol Hill around 1,000 sf with one parking spot in a decent building. Or you can move to Meadowbrook, Seward Park, south section of West Seattle, and a few other favorite hoods and $500,000 will buy you a three bedroom two bath house in good condition. You choose? Both options are great and both sets of buyers are different.
- Be Practical: Slow and stead wins the race in this market. Know what you can afford, be realistic, look below your price point, save money, and be practical. Our practical buyers are cleaning up in this market with decent deals and realistic expectations in multiple offer situations. And for god sake hire someone who can represent you well. Read more in our buyer section >
- Sell if You Can: Seriously we are in once a generation market right now. Sell if you can. Especially sell if you have a condo. Eventually new developers will figure out they can build a condo building and make bank. Make the money before the developers make the money. Read about our most recent listing closing where the Diva Difference Strategy helped our clients to be the Divas of Real Estate >