32 percent of homes across the greater Seattle region had price drops last month, up from 27 percent a year ago and the highest for any June since the end of the housing bust in 2011.
In a nut shell, what a difference a couple of months can make for the local housing market…. We have now gone from bidding wars to price reductions in what seems like the blink of an eye.
The Seattle area and most of Western Washington as a whole has seen the largest home price increases in the country for the last 20 months in a row according to Case-Shiller data. Currently the median house price in Seattle is at $812,500 and on the Eastside the median home price has reached $978,000. All of this has lead to a point where record-high home prices, overly optimistic sellers, slowly climbing interest rates and buyers exhausted by bidding wars have weighted the market. In addition, the total inventory of homes listed for sale has now grown for three straight months on a year-over-year basis, including nearly 14,500 new homes added just last month.
So, what does this mean for sellers and buyers?
Sellers need to be more realistic about the value of their home and shouldn’t expect to get multiple offers in the first few days on market. Typically, a “Normal” or “Balanced” market means 30 to 45 days on market and closing at or near asking price for a properly priced home. It also means that offers waiving inspection, financing and with Escalation Clauses significantly over the asking price will no longer be the norm.
Buyers will likely have more homes to look at in their preferred price range and area and may encounter less competitive multiple-offer situations. Though the area as a whole still has tremendous job growth and the over-all housing market trend is still to increase. Prices will tend to trend upwards in the range of 3 to 5% a year meaning $1,000,000 homes will increase by about $40,000 over a year and NOT jump by $40,000 a month any longer. Rates are also forecast to increase, so buying now is still a very good overall option and investment as within a year buyers will still see increased equity in their homes and at least better “projected” interest rates which equates to additional savings.
- Inventory is normal as compared to previous normal months / years.
- Three to six months of inventory is on the market.
- Comparable sale prices are close to active listing prices.
- Sales numbers have stabilized.
- Median sales prices are flattened.
- Real estate advertising remains uniform.
- For Sale signs are replaced with pending or sold signs within 30 to 45 days.
· In a balanced real estate market, you can expect a few things to happen like "normal." Get an inspection, offer a fair price that you can pay, and prepare yourself to share or pay the closing costs, depending on the situation.
· For Buyers, after years of rapidly escalating prices, you’ll have a chance to buy your dream home and be less likely to be drawn into a bidding war.
· For Sellers: Just look back at where your home’s value has come from over the last 3 years. You rightfully should be amazed at the increase but understand that prices couldn’t realistically keep going up at that pace. Enjoy the new-found equity and understand that modest and sustainable property value increases will keep us from having another market correction like what happened back in 2007 -2011.
The Cascade Team provides a full service experience that is a step above; by executing a marketing plan for your home that is technology rich and high in service. We leverage all available technology tools to provide the most exposure possible for your home, and utilize those tools to increase the communication and service to you our client.