On today’s Roy & Kim Show the subjects were the Seattle Real Estate Market and, of course, INAUGURATION DAY. Because of power outages across Seattle last week, last Wednesday’s show was canceled. Hence, our last episode coincided with the January 6th Insurrection. Today, the tone is markedly different, as we celebrate the official end of the T___ regime.
(Yea, we’re not going to make you read his name here. Not today.)
Naturally, all of this came up in conversation today between Roy, Kim and their guest, our own Rocky Flowers. They also talked shop about the Seattle real estate market, and what they think the next few months brings for buyers and sellers.
Looking Ahead At The 2021 Seattle Real Estate Market
The year ahead is going to be wild for buyers and sellers. It’s still what we might call the COVID market, and that has profound affects across sectors of the housing market.
- Single-family homes are still the hottest ticket
- Condo and townhome prices are flat, even in desirable neighborhoods
- Urban rental markets are seeing prices drop, and renters becoming buyers
- Home sales continue to be fast-paced and competitive
- These trends will continue for the first half of the year
- Buyer’s home inspections are often being waived, but this comes with risks
Roy, Kim and Rocky offer useful insights into each of these subjects on this installment of the show. Let’s cover some highlights.
Single-Family Homes Rule The Pandemic Seattle Real Estate Market
Cabin fever has home buyers longing for more space, so single-family homes are more in demand than ever. Pair that with exceedingly low inventory and you have a very hot market. Roy is getting calls from rental property owners who want to sell, but these folks are a minority. There is just no new inventory coming in for single-family homes in Seattle, and even the suburbs and towns around Seattle are staying competitive.
If you are an aspiring home buyer in Seattle, if you extend your search to areas like Burien and Shoreline, you will still be competing with many other buyers. You may need to change expectations about what kind of home you can get in this market, and definitely come with a capable agent and comprehensive strategy for writing a winning offer.
Flat Condo And Townhome Prices Offer An Entry Point For First-Time Buyers
On the show, Kim noted that COVID’s impact on real estate is a unique one in her over twenty years of experience in Seattle Real Estate. The different economic waves and recessions hit differently, because while COVID has had an economic impact, its larger effect is based on lifestyle. Walkability and access to amenities is not a driving factor for buyers in a pandemic, and condos have been the most affected.
Expanded inventory has contributed to a flattening of value growth in townhome and condos, but the latter has truly flattened…for now. When COVID has been brought under control, people are going to be very celebratory. Dense patches of nightlife and culture will be booming, and the real estate in that area will be a hot commodity again.
That could take time, but if the goal for a home owner is to get in the door and build equity, now is the time. That dream home doesn’t really exist for anyone right now, thanks to low inventory. Rocky points out that people wanting a single-family home may need to opt for a townhome, and those who aimed for a townhome may opt for a condo.
Roy straight up calls 2021 the year of condos for first-time home buyers.
Those aforementioned landlords that are looking to sell investment properties are more often condo owners than single-family homeowners. As the rental market dips and those rents no longer cover the mortgage for landlords, we may see even more condos on the market.
Everyone agrees that prices will start to climb again, and it’s just a matter of time. But even outside pandemic conditions, buying a condo can be scary. It involves offering up a lot more control than buying a detached home, and the dues are another matter.
Kim points out that having an experienced agent can really ease this process. Speaking on behalf of Team Diva, she noted that “We know the buildings that are quality buildings, that are good investments,” and the buildings to avoid. And if it’s a newer building, then we know how to do the research. That’s something first-time buyers may struggle with on their own.
Everyone Is Chasing Prices In The Seattle Real Estate Market, Buyers and Sellers Alike
A lot of conventional wisdom and strategies have been thrown out the window in this uncharted territory. setting aside how different showing houses has become, there is the fundamental matter of pricing. When determining prices, sellers and their agents don’t often have many recent comparables to use as guidance. Sales prices aren’t public until 30 days after listing, but in many cases the data being used is even older… sometimes three to six months old.
In a market that is climbing this rapidly for single-family homes, figuring out the target isn’t easy. It’s tricky for sellers, but it’s even harder for buyers. Roy, Kim and Rocky all agree that having realistic conversations with buyers is vital. They need to understand that outdated comparables lead to outdated listing prices, and it is not up to buyers to decide value. As an example, Roy notes that houses listed at $575k based on three-month old data can sell for $675k. And if you aren’t prepared for that possibility as a buyer, you are going to be caught off-guard.
As prices climb, that unexpected high offer becomes the floor of the market. Roy notes that we usually see the list price and sale price meet in mid-year, followed by a correction. We’ll see if that holds true this year, or if things keep climbing ahead of expectation.
The Real Estate Market Changes With The Season, And Winter Is Hopping
Rocky points out that the perception around the Seattle Real Estate Market in January is often that it is slow. This, however, has not held true for us: Our listings in January have done amazingly well over the years. The challenge is against the mindset, but in this pandemic market with so many eager buyers, that challenge hasn’t been there as much this time around.
Roy has been fielding calls from buyers who are interested in listings from last year that were pulled from the market at more sluggish times. Selling off market is probably happening more than we know, as people try to avoid competing openly.
Kim observes that fall is usually a slower market, and that has contributed to the dearth of information for pricing now in a frenzies winter. That’s why we’re seeing what appear to be sudden bumps in prices. What’s really happening is that the data and sales are catching up with the demand that has quietly grown over the last few months, consistent with the rest if the year.
The market went up nationwide about 8 percent last year, but as always, different areas and sectors benefited more than others. If you are selling a single-family home in Seattle, be prepared to evaluate multiple offers.
Interest Rates Will Increase Later This Year
Contributing to the frenzied market are the historically low interest rates, but that won’t last forever. Rocky reminded viewers of the Roy and Kim Show that the Fed is poised to increase these rates later this year. This will also affect affordability for buyers, so the first half of the year will likely be the busiest.
When asked by Kim what he thinks buyers need to know most importantly in this market, Rocky said “Pre-approval.” Before you even start looking at homes, buyers need to know how much they can spend and get pre-approved. “Figure out what is you comfortable monthly payment, and base what you are going to buy on that payment.”
Roy notes that listings are going up on Friday, and offers are being reviewed on Monday for homes. If you aren’t pre-approved for a loan, you will NOT have time to guarantee financing and make a winning offer. This also has had an impact on inspections…namely, a lot of buyers are waiving their rights to them.
2021 Seattle Real Estate Market Predictions
Pre-inspection of homes simply is not a thing in much of the country, but it is in Seattle. Many sellers are offering up their own inspection records and telling buyers “Take it or leave it,” without leaving time the buyers’ own home inspection. Roy predicts that this trend will continue, but that buyers and sellers will see more lawsuits as a result. Buyers can protect themselves by writing inspection contingencies in their offer, but may thus be seen as less attractive.
On our side, we at Team Diva will encourage sellers to do thorough inspections and not force buyers to waive them. This helps ensure that sellers are confident in their preparations, and are better protected long-term.
Rocky predicts that buyers will be fighting for every single property out there, inspection or not, from now until mid-summer. His advice: Be ready to do all the due diligence up-front to write the best offer. If you can, land a home before interest rates inevitably rise again, along with prices, as this will affect affordability in multiple ways.
Kim reminds buyers that they are on the sellers’ schedule no matter where they go in the region. Gone are the days when you can casually tour, or even just call for an appointment. The market for single-family homes will remain most competitive, but no matter what you aim to buy, you have to be disciplined. Read our blog about winning multiple offers for more insights.
One Last Note On Renters: We Support You
Everyone on our team was a renter before they were a home buyer. Rocky shared on the show that he felt pushed to buy because his landlord was forcing him to choose between a major rent increase or getting locked in a two-year lease. Many landlords have made good money jacking up prices, so while we applaud savvy and ethical real estate investors, our sympathy always lies most with renters.
Roy feels especially strongly about this, as he started his real estate career working with landlords and renters. Now is not the best time for landlords, as rental prices dip. But many renters are struggling, too, with loss of wages. Working in real estate, one of our biggest passions is seeing smarter density and more affordable housing. During a pandemic, it’s more important than ever.
Fixing Seattle’s broader housing problem has to be a top priority even after the pandemic. For now, the country is in triage. President Biden is signing an executive order to extend the federal moratorium on evictions and foreclosures through at least March 31. We need to keep pressuring local leaders to focus on short- and long-term solutions and aid for those affected by the same crisis that is making the Seattle Real Estate Market so competitive. A rising tide can lift all ships if we think collectively.
And so on that note…
The Inauguration of President Joe Biden
Despite our country’s many challenges, it was a buoyant day in the nation today. After the last two weeks, Kim was half-expecting a disaster to unfold. Fortunately, it did not. Roy and his wife were scrolling through Twitter earlier today and remarked how happy it was. “Does this count as doomscrolling anymore?” he asked. Rocky noted that he wakes up more relaxed, just knowing Trump is off Twitter.
Positivity ruled the day. Kim was especially moved by the fabulous Amanda Gorman, the Youth Poet Laureate, and the youngest poet to read at a Presidential Inauguration. Rocky owned his Gaga fandom and praised the Lady’s whole look and performance. Of course, Gaga wasn’t the only lady who wowed us: First Lady Jill Biden in a glittering coat, Michelle Obama and her plum suit and perfect hair, and of course our first female Vice President, Kamala Harris.
Even Bernie Sanders got special attention, though not quite in the same manner. The internet and photoshopped Sanders (pictured in a pragmatic green puffer and knitted mittens) into all manner of settings. Roy giggled about the memes, and we’re sure they are just getting started. Truly a day of levity after a very dark chapter.
Executive Orders Ready To Reverse T___’s Legacy
The work is just beginning, of course. And Biden is on it, with plans to sign 17 Executive Orders in his first 24 hours as president.The aforementioned eviction and foreclosure moratorium is just one of them.
The previous administration never released a healthcare plan, nor gave us that much hyped “Infrastructure Week.” No, in the final days of power, this band of merry white supremacists released the 1776 Commission, an effort to maintain whitewashed American history in education. And for nothing: President Biden has already signaled that he will scrap the commission in his first days in office.
It’s a fitting end to the T___ era in some ways. The last four years were largely driven by a psychopathic narcissist’s need to erase the legacy of a Black President. He did immeasurable harm to countless lives in this effort, and these malignant effects will last for years and years. And yet, so much of what he tried to sabotage and destroy will be rebuilt, as Putin’s Puppet sees his own legacy erased.
We’ll be rebuilding together, Divaland, and in the months to come, we’ll be speaking with folks who have all sorts of inspiring visions for the years ahead. Stay tuned!
Listen To Previous Episodes Of Our Seattle Real Estate Podcast
Check out previous episodes and recaps of the Team Diva Seattle Real Estate Podcast with Roy and Kim.
- Post-debate, Election Season Free-For-All- Episode 9
- Indivisible Plus: Washington: Episode 8, With Jon Pincus and Brandy Donaghy
- 60 Days Of Action: Episode 7, With Chavi Hohm
- Back To School Special: Episode 6, With Manuela Slye
- The Big Summer Recap
- Supporting BIPOC Candidates: Episode 4 With Joy Stanford and Mona Das
- Seattle Real Estate From A Black POV: Episode 3, With Rocky Flowers
- Being A Good Neighbor To Black Communities: Episode 2, With Marlon James
- Education, Real Estate, And Equity: Episode 1, With Dave Jones
Our next episode in early February will feature astrologer Stephanie Gailing. Watch the latest episode of the Roy and Kim Show on YouTube.